FPJ Analysis: Glitches In UPI Unacceptable, Raise Concerns Over Reliability

The Unified Payments Interface (UPI), which has been a remarkable success story in India’s digital revolution, suffered its third outage in a month, leading to chaos at shops, malls and restaurants, hitting small traders and vendors hard. Users were left hanging while making payments, and there was utter confusion for a few hours. The system, which was launched in 2016, has become critical to millions of Indians, who effortlessly migrated from traditional methods of payment to adopt UPI. One of the most user-friendly and seamless transaction systems, it has been rated as the world’s most popular alternate payment method by global payments hub Paysecure. Every roadside vegetable vendor, fruit seller, chaatwallah or teashop owner is connected to UPI, and a generation of Indians does not use cash at all anymore. This is in keeping with the government’s stated aim of increasing digital transactions. When demonetisation was announced by Prime Minister Modi in November 2016, one of the planned outcomes was a smooth shift to digital transactions, and the launch of UPI helped a great deal in this endeavour to achieve a cashless economy. It is remarkable how universal the method of payment has become all over India. This quiet revolution that has overtaken the country is of great significance because it affects everyone: the common man, the middle class and the super-rich. Therefore, it is imperative that everything is done to maintain the payment method by investing more resources, upskilling it and catering to evolving user needs. UPI is way ahead of other payment systems the world over, such as Skrill, Pix and China’s Allpay, which have fewer transactions.

The National Payments Corporation of India website cited intermittent technical issues and said ‘unscheduled downtime’ was 95 minutes over two ‘incidents’. However, even one such glitch is not acceptable. About 75 per cent of retail digital payments are by UPI. The downside is that UPI frauds have also seen a remarkable rise. Now it is for the government to step in and ensure that this truly valuable payment method is not allowed to atrophy. Glitches must be rectified immediately so that there is seamless connectivity and this simple payment method, which has become second nature for millions of Indians, continues to thrive. UPI, along with the mobile revolution, is one of India’s stellar achievements of the 21st century, and it is important that nothing comes in the way of its continued success.