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by egghese
1024 days ago
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Not interested on flamewars here. Reading this thread it looks like merits of system is upon peoples arbitrary metrics based on varying perspectives. So a constructive discussion is not going to happen. So until there is some standardised comparison probably making any statements about merits or demerits, including mine are just opinions without facts. |
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However, I've spent a lot of time studying the payments space (7+ years now!) and I'll quickly give you 3 reasons why UPI is "better" than Interrac for example :
1) Better User Experience
Systems like Interrac enable instant bank to bank transfers. However, they don't allow for third party applications to initiate payment requests / view balances. Customers are restricted to choosing a bank and sticking with the user experience defined by the bankers.
UPI , on the other hand, mandates banks to accept and honor payment requests generated from "Third-party payment application providers (TPAPs)"
This allows for a much larger variety of payment experiences to be designed, which can be "fit on top" of the existing banking layer.
PSD2 regulations, in Europe tried to achieve this effect, however most banks ended up implementing a custom version of the protocol instead of adoption a common standard.
2) Lower costs
Adoption of the UPI payments system has massively reduced the cost of sending money anywhere across India.
For Indian banks, the cost of sending money via UPI is wayy less than the "Gas fees" required to facilitate crypto transactions or the fees charged by VISA/MC networks to facilitate transactions.
Similarly, costs for a merchant to accept UPI payments are much lesser than accepting any other form of digital payment today (in India and maybe the world).
3) Federated Architecture
From Day-1, the UPI ecosystem has been design to support multiple switch providers, payment institutions and local regulations.
If countries like France, adopt UPI, they won't have to depend on centralized servers hosted in India to run their payments technology.
All their data can be hosted in servers within the country and the UPI instance facilitating French transactions can be tailored to honor local regulations and limits.
This flexibility is not as easy to implement with older payment systems (like VISA/MC).
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Much of this can also be attributed to the fact that the other payment systems were developed 15+ years ago.
The recently launched, FedNow system adopts a similar approach to UPI. Will be interesting to see how it evolves
https://www.youtube.com/watch?v=obbpLGVoVxI