Want to write about UPI in India, the Unified Payment Interface. It’s a genuinely big deal, though obviously it comes with its politics attached too. The BJP considers it one of their major achievements, and honestly, I agree with that part of it. Giving millions, billions of people bank accounts linked to UPI has made payments swift and quick. I won’t say safer, because it has its own issues, but the widespread adoption is undeniable. Whatever anyone else’s take is, here’s mine, based on my own experience, before UPI and after, and how that experience itself changed as time went on.
Before UPI, the majority of people in India were using cash. Very few used debit or credit cards, I don’t have exact numbers, but I wouldn’t be surprised if it was only five or seven percent on cards, ninety plus percent on cash. That changed drastically over the course of COVID and afterwards, with UPI’s emergence.
When I used to go to India annually for holidays, I’d carry a lot of cash, and my wallet was thick because of it. You’re dealing in thousands every time, not in fifties or twenties, so the notes pile up. Then came debit and credit cards, which I was already used to using in the UK. But in India, only the big shops and merchants had a card machine. Small merchants, I’d say ninety percent of them, didn’t, obviously because of the cost attached to having one. So I’d pay cash there, and where card machines did exist, my international card was generally well accepted.
Then UPI slowly started appearing. At the time, my NRI account with ICICI didn’t support it. Early on, when it wasn’t yet that popular, it didn’t bother me, I was managing fine with cash and card. But slowly I noticed merchants starting to reject card machines altogether, and that got frustrating. Whenever I spent in Europe, or even in the UK itself, my card went through smoothly every time. In India, it became hit and miss. Then UPI rolled out rapidly and everyone started using it, and I felt properly left out. My bank didn’t support it, and by then around ninety nine percent of places either had no card machine at all or didn’t accept my card even where one existed. I was stuck like that for a few years.
Eventually ICICI started supporting UPI, and last year when I went to India, I had a genuinely good experience with it. I was using it everywhere, every nook and corner, small merchants, the sabziwala, the paanwala, whoever it was, they all had a UPI QR code. Scan it and you’re done, both sides happy. Card machines cost the merchant money both ways, UPI is free for customer and merchant alike, so it’s no surprise everyone shifted to it so fast.
There’s a catch though, and it’s the thing I don’t like about UPI. It’s a closed system, really only built for people already inside it. If you’re coming from outside India, you can’t just start using UPI, because it’s tied to an Indian mobile number and an Indian bank account. And getting a SIM card in India is its own separate palaver. When I’m anywhere else, Europe included, I just tap my card or use Apple Pay and it goes through without a hitch. That’s simply not an option for a visitor in India in the same way.
I don’t think the government particularly worries about this, because UPI is built to serve their own people, and fair enough. But it does leave a real gap for anyone travelling in from outside. My own wife is a good example. She doesn’t have an NRI account, and opening one for her turned into its own bit of hassle. So when she’s in India, I just hand her my card so she can tap and pay, but she can’t use UPI herself, since that needs a linked app and phone setup that isn’t straightforward to arrange from outside the country.
So UPI is genuinely excellent, especially for financial inclusion within India. But it makes things properly difficult for anyone coming in from outside, who’s left relying on cash or hunting down the shrinking number of merchants who still take a Visa or Mastercard. I don’t know what the fix looks like, some kind of bridge system maybe, but I suspect it affects too small a number of people for anyone to really prioritise it.
On a related note, I’ve been listening to Puliyabaazi for a long time now, right from their early episodes, and they did a proper deep dive into UPI on the podcast that’s well worth a listen if this topic interests you.
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