Standing amid the crowded lanes of Chandni Chowk, one of India’s largest commercial hubs where transactions worth tens of thousands of crores take place every year, the transformation of India’s economy is visible in the blink of an eye or scan of a QR code. Street vendors, shopkeepers, wholesalers and customers routinely complete transactions using the Unified Payments Interface (UPI), a digital payments platform that has revolutionised the way Indians exchange money.
During the recent Monsoon Session, Finance Minister Sitharaman declared in Parliament that UPI will remain free.
Finance Minister Nirmala Sitharaman has repeatedly emphasised that UPI has delivered enormous benefits to the Indian economy and has supported the government’s efforts to expand digital payments. The government has also continued to subsidise the digital payments ecosystem to encourage adoption. “I don’t think consumers will ever be charged. Payers will never be charged. Instead, he believes the challenge lies in developing a sustainable business model that can support the future growth of UPI. “There are a lot of savings the government is getting from not printing as many currency notes. There is a lot of savings in all of that.
More than 95% of the merchants will probably not be charged ever,” he said.
The issue is not whether ordinary users should start paying for digital transactions, according to Paul. ATMs are not being used as much,” he said.
“There is a fundamental issue. We don’t seem to have a sustainable business model for UPI to keep it growing to the billion people and the kind of size we want it to be. “It should not go to the customer. It should not go to the payers.
UPI usage can still grow by five fold in our country in the next decade,” he said. “Having a little bit of a business model adjustment where certain large merchants pay for certain large transactions is an acceptable compromise,” he said. It should not go to the small merchants,” he said.
