The new UPI equation
from Two by Two (Private) Hosted by The Ken
For six years every UPI payment in India was free. This was because a rule from January 2020 said nobody could charge a merchant for accepting one. Then on the afternoon of 6 August, the Lok Sabha removed that guarantee by voice vote. The details of the rules haven't been framed yet, so nobody knows what a UPI transaction will actually cost, but what's clear is that the arrangement India's payments ran on for six years has ended and a new one is being written. The pool of the money involved is large enough to redraw who wins in Indian fintech. In this episode, Praveen is joined by Pranav Gundlapalle, Director and Senior Research Analyst at Bernstein who has been closely tracking India’s payments landscape for years, and with Bhavik Kaul, former Chief Product Officer of Supermoney, Flipkart's fintech arm and the fifth-largest UPI app, who before that spent several years across Indian fintech including running LazyPay and PaySense at PayU Finance. Pranav brings the perspective of the ecosystem from outside it; and Bhavik presents the product view of someone who has built inside it, in a world where MDR always existed. All of them work through a series of assumptions to derive the new UPI equation — who was paying for it earlier, and who will be paying for it in the future? How much? And what are the second and third order effects of this UPI rearrangement?
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