Remember that epic cemetery scene in Sergio Leone’s 1966 spaghetti western, The Good, The Bad and The Ugly? Something similar is at play in India’s newest payments platform, United Payments Interface (UPI). An app called BHIM (we’ll come to it later, stay with us), another app called PhonePe (owned by the largest local e-commerce unicorn, Flipkart, and we’ll come to that too) and major banks are caught in a tense Mexican standoff with their made-in-India guns trained on each other.

It has just been five months since UPI went live, and how did it come to this so soon, you ask?

Before we get there, you should know how it all started.

The one with the idea

All breakthroughs happen with the right questions asked. For instance, can money be sent like how one sends an email? Can we do away with things like IFSC codes and answering our second cousin’s dog’s name every time we need to transact online? Also, why do we need to wait four hours to add a new beneficiary to send money?

Questions we mutter to ourselves every time we transact online.

But about two years ago, folks over at the National Payments Corporation of India (NPCI is an industry body set up in 2008 by the banks and India’s central bank to create an efficient retail payments network) were looking to solve this.

Source: As of 22 January 2016, R Watal Committee Report

It also had as partners technocrat Nandan Nilekani, the architect of India’s biometric identity mega project, Aadhaar, and (yet) another industry body—iSPIRT (the Indian Software Product Industry Round Table was set up to help Indian startups and companies create and market great software products). Why? To help with the development, evolution and evangelisation of retail payments.

The group saw that the already existing but cumbersome six-year-old inter-bank payments protocol, Immediate Payment Service (IMPS) had crossed its expiry date and was beyond just a slap-on feature kind of improvement. Instead, they wanted to use technology to turn IMPS into something that the world has never seen before—UPI.

The adrenaline was high. It captured the zeitgeist of our times.

To do that, they wanted to take the platform beyond banks and bring technologists and engineers to solve this. This being 2015, an app was envisioned, naturally, which could be used by any account holder who wanted to transfer funds. Their thought process was this: imagine you could go to your nearest bank, not because you have an account there, but because it provided better service and was more convenient.


Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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