Let’s first understand why UPI was implemented by the government of India.
Unified Payments Interface which is locally/globally known as UPI is an instant payment system developed by the National Payments Corporation of India (NPCI).
NPCI is not controlled by the government of India but follows the laws of the land. Neither it is controlled nor operated by the Reserve Bank of India (RBI).
It allows customers to transfer money between bank accounts of different banks using a mobile application. It is available for free and can be downloaded on devices that either support Android or iOS. UPI also allows customers to pay for goods and services using their bank accounts without the need for a physical card or cash. The UPI system is based on the IMPS (Immediate Payment Service) platform that was most commonly used to send instant money to any bank account across India.
The problem with IMPS was that you need to enter details like the bank account number and IFSC code on a form provided on your bank web portal after logging into your account dashboard. This was not possible for every citizen of India as Internet services were not cheap before 2015. In 2016, JIO mobile began offering affordable 4G internet service, which has been significant in facilitating India's massive internet growth.
To make payments easier for everyone, UPI was introduced to make them quicker, more secure, and accessible to both individuals and businesses.
Pros: 1. Convenient and secure payments.
2. Easy to set up and use.
3. No need to share bank details with the recipient.
4. Money can be transferred anytime and anywhere.
5. No need to carry cash or cards.
Cons:1. UPI transactions are limited to INR 1 lakh.
2. Internation transactions cannot be done.
3. Transactions getting declined on weekends is a common issue.
4. Only 5 transactions in a day are permitted.
5. There is a risk of data theft if the user’s UPI PIN is compromised.
I won't be discussing Bitcoin here as we all know what it is and what it has achieved from 2011 to date and what it can achieve 20 years from now. Let’s dive straight into the important aspect of this post which is the comparison of Bitcoin against UPI.
Pros: • It is decentralized.
• Bitcoin is more secure than fiat.
• To an extent gives anonymity to a user's transactions.
• It is cheap if the transaction fee is compared with international fiat transfer.
• Anyone can send & receive Bitcoin globally.
Cons: • Bitcoin is volatile.
• Not regulated. For some it is a blessing in disguise for others it is not.
• Not all merchants accept Bitcoin as a mode of payment.
• Sending & receiving Bitcoin is complicated for someone not technically sound.
• As fiat currencies have some sort of protection from the government, it does not have such privileges.
My Opinion:I believe it is too late for UPI to challenge Bitcoin. UPI was forced onto Indian citizens but Bitcoin just got known through the spread of mouth. Bitcoin is is a perfect example of economic independence for some like me or you but, a fiat currency or a payment processor like UPI that was made for fiat currency as INR will never be able to provide complete financial freedom. Although Indians have been independent for the last 75 years, they are still ruled by those who control the INR.
