Can UPI become a global superstar?

While the Indian IT services industry flourished, one grouse was that India lacked world beating tech products and apps. We are nowhere having an operating system for any device or something like a social media network that succeeds around the world.

We are nowhere in the list of the world’s top tech products, software, apps etc. If the private sector was this bad, then would the government ever fare any better?

But curiously on the digital front, the Indian government is doing very well, and we are more digital than many countries in the world, even the West. Just think about superpower America which uses paper ballots and paper ID. That way India’s Aadhaar and CoWIN are both leagues ahead.

One real surprise has been India’s Unified Payments Interface or UPI, which is from the India Stack stable. Month on month it creates newer and newer records. In September 2022, it crossed 678 crore transactions with a monetary value of Rs 11 lakh crore. UPI is probably India’s favourite desi app ecosystem. While Paytm became a household name after demonetization, UPI has become the one big ring that unites all other rings since then: PhonePe, Amazon Pay, Google Pay, Paytm and of course the government’s own BHIM app. Hundreds of banks have also joined in the party.

This is one of the rare times we have become a global No. 1 in a digital concept: real-time payments. A report came in 2019 that Google urged for a similar system in the US. Now the Federal Reserve there may be coming out with a similar system called FedNow in 2023. Many countries are trying to follow the India model.

RuPay credit cards, UPI payments using voice in regional languages, QR codes for cardless cash withdrawals, use of UPI for IPOs, linking to recurring transactions and overdraft facilities… the innovations are many.

Dozens of countries have expressed interest in integrating UPI into their monetary system. This includes Asian countries like UAE and Western ones like France. A recent example is Oman accepting the RuPay card on the UPI platform.

In a surprise move, SWIFT (the backbone for global financial transactions) unprecedently kicked Russia out after its invasion of Ukraine. Russia formed an alternative called SPFS and is likely to be integrated with UPI. While UPI has already conquered India, it has emerged as the first mover on the global stage.

India recently overtook the UK to become the world’s fifth largest economy. In the next ten years we will overtake first Germany and then Japan. The Big 3 will then be the US, China and India.

In terms of “digital governance” being a “digital economy”, India has a head start over the West.