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UPI works and at scale, but its sophistication is overrated. Assuming that the payer has a working, internet-connected smartphone is a very simplifying assumption. Can't add (global support/foreign currency/form factors) easily. https://twitter.com/somnath1978/status/1275681562403713024
Gluing together 100+ currencies, regulatory domains, and clearing/routing systems into one seamlessly working payment network, with authentication delegated to financial institutions, supporting basically any form factor (physical card, digital card on smartphone/smartwatch)...
... supporting pre-auths, offline payments (at 40k ft), dispute resolution mechanisms (sender's bank can yank authorization at a later point) - one can quickly appreciate the system complexity.
What UPI's tells us that this complexity may be overkill for a huge chunk of the payments - which are domestic and thus in the same currency, working smartphones are there. People are not used to dispute resolution being a feature, and the 2% tax is unnecessary.
But UPI is only able to exist because it captures the easier lower-hanging fruit, and relies on Mastercard/Visa being there to capture the fat-tail of complex flows.
And this is great, you save 2% for regular, routine shopping.
And this is great, you save 2% for regular, routine shopping.
But it'd be naive to pretend that UPI is in any way ready to replace these networks, or that it's any more than "syntactic sugar" over (account number + routing number). Its existence is contingent upon those networks existing for people who want more sophistication.
As for cryptocurrencies, I'll just leave it at this - the might of the 700B US military is not sufficient to prevent BTC payment flows to and from Iran. For good or for bad, no bank can hope to accomplish this.
