Challenges of the Unified Payments Interface (UPI)
- Some experts worry that UPI won’t be able to maintain itself over the long term without levying MDR to pay for its infrastructure. Right now, neither the customer nor the merchant pay an additional fee.
- Even though cash transactions have become less common since the introduction of UPI, they are still important. Due to the tax terrorism threat and cash’s greater acceptance as a payment method, people still favor using it.
- It is still very difficult to conduct UPI transactions because there is still a significant percentage of the population without access to the internet or smartphones.
- Since most people lack digital literacy, they are unable to use the UPI system. Furthermore, UPI apps’ lower adoption is caused by their predominant use of English.
Unified Payments Interface (UPI) and its Challenges
A system called the Unified Payments Interface (UPI) combines several bank accounts. It makes easy fund routing, and merchant payments into a single mobile application (of any participating bank). Additionally, it supports “Peer to Peer” collect requests that may be planned and paid for according to need and convenience. It is an immediate real-time payment system that enables customers to transfer money between different bank accounts in real-time without disclosing personal information to the other party. The National Payments Corporation of India (NPCI), which is governed by the Reserve Bank of India (RBI) and IBA (Indian Bank Association), established the concept of UPI.