[inapis]

There is a central provider called NPCI (National Payments Corporation of India). They run the entire network and control who gets on or not. Banks are used as the integration point because UPI necessitated a bank account to run out of. Since you’re directly debiting money out of someone’s account you can’t exactly turn away the bank and when they are on-board it makes sense to use them as an integration partner for legal reasons (as well as customer support).

[pas]

The merchant's bank account should be just a parameter you plug into some account at NPCI, and that's it.

Sure, the banks should do the chargeback/fraud management, but the IT interface toward the merchants should be completely standardized.