Despite the ‘openness’ of the UPI architecture, a concentration of market power in the UPI ecosystem is no secret.
Clocking volumes as large as 10,000 transactions per second, the Unified Payments Interface (UPI) has revolutionized real-time payments in India. Launched in April 2016, a few months before demonetization and the arrival of new telecom players, initial UPI adoption was driven primarily by the state’s clampdown on the cash economy and dramatic crash in telecom data plan prices. Subsequently, its open architecture model, which allowed for interoperability across banks and payment service providers, steadily endeared itself to India’s mobile-first consumer economy by offering unparalleled transactional convenience. Today, the country has over 100 million monthly active users of UPI. So, what sets UPI apart? At the forefront of its story is a strategy spearheaded by National Payments Corporation of India (NPCI), which, as UPI’s chief architect and custodian, has been dismantling barriers and incentivizing UPI adoption at two levels: local and global.