Blitz Bureau
NEW DELHI: Thanks to the massive adoption of unified payments interface (UPI) based digital transactions, India now makes faster payments than any other country in the world, an International Monetary Fund (IMF) note has emphasised. Since its launch in 2016, UPI has grown quickly, while some proxies for cash usage have begun to decline. UPI now processes more than 18 billion transactions per month and dominates other electronic retail payments in India, according to the note titled ‘Growing Retail Digital Payments: The Value of Interoperability.’
UPI is an instant payments platform built over the Immediate Payment Service (IMPS) infrastructure. UPI has transformed the digital payments landscape in India. Evidence from the platform suggests that interoperability can improve users’ experience of digital payments and expand overall adoption.
“Interoperability directly increases users’ freedom to choose their favourite app, enabling them to take full advantage of the variety and quality of apps available. Interoperability can also facilitate entry by new providers and incentivise existing providers to upgrade their apps, offering indirect benefits to users,” said the IMF note.
As a result, interoperability can make adopting digital payments more attractive for users and hence increase overall adoption relative to a world with only closed-loop alternatives. Providing infrastructure for interoperable systems, or otherwise supporting interoperability through regulation, could be a promising avenue for countries seeking to transition from cash to digital payments, read the note.
The National Payments Corporation of India (NPCI) launched the Bharat Interface for Money (BHIM) app in late 2016, when total UPI usage was small and there were fewer other providers.
