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Payments

UPI vs. card payments: A system designed for mass adoption needs to minimise steps, failure points

UPI makes it easy for a merchant to accept payments digitally without an upfront cost of a POS machine. But it fares poorly when compared with a card transaction. This is a consequence of too many moving parts and a poor architecture of UPI.
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17 Dec 2019 5 Mins Read 6 comments
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All of us, at some point or the other, have seen a transaction fail – be it UPI or a card. I have spent a significant part of my career looking at systems from a reliability perspective. So, it makes sense to see UPI and cards from this angle. In this post, I have mapped the various parties, steps, and
UPI ecosystem are not transparent. Without a proper incentive structure, why would the participants ensure a higher quality of service? All this makes me wonder if we just traded long-term robustness for short-term growth and metrics. (The writer is founder, Base, which works with banks, fintech companies, and startups.) (Graphics visualisation by Praneeth Bodduluri)
All of us, at some point or the other, have seen a transaction fail – be it UPI or a card. I have spent a significant part of my career looking at systems from a reliability perspective. So, it makes sense to see UPI and cards from this angle. In this post, I have mapped the various parties, steps, and UPI ecosystem are not transparent. Without a proper incentive structure, why would the participants ensure a higher quality of service? All this makes me wonder if we just traded long-term robustness for short-term growth and metrics. (The writer is founder, Base, which works with banks, fintech companies, and startups.) (Graphics visualisation by Praneeth Bodduluri)

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