What are the differences between UPI and its rival project?
Background:
Since its launch in 2016, the Unified Payments Interface (UPI) has revolutionized digital payments in India, enabling easy and instant bank-to-bank transfers via a mobile app. The Reserve Bank of India (RBI) had been developing a rival system called the “Retail Payments System” (RPS).
The decision:
However, the RBI has recently abandoned the RPS project due to concerns over competition and the potential impact it would have on the UPI system. A committee led by Nandan Nilekani recommended that the RBI should instead focus on improving the existing UPI system.
Impact:
This decision is a major boost for the UPI system, which has already processed over 2.3 billion transactions with a total value of INR 4.3 trillion (USD 58 billion) in August 2021 alone. The UPI system’s popularity is expected to continue growing, and the decision to abandon the RPS project will help avoid any potential conflicts between the two digital payment systems.
Takeaways:
The RBI’s decision highlights the importance of collaboration and consolidation in the Indian digital payments space. As UPI grows, it is important that it remains adaptable and responsive to new market trends and technological advancements. The decision also provides an opportunity for further growth and innovation in the industry.
Conclusion:
Overall, the RBI’s decision to abandon the RPS project and focus on enhancing the UPI system is a positive development for India’s digital payments landscape. It reflects the need for consolidation and cooperation among stakeholders while also providing an opportunity for further growth and innovation in the industry.