Moneycontrol | UPI: The world needs India’s Digital Public Infrastructure, but can’t see the benefit

India’s Digital Public Infrastructure (“DPI”) is a domestic success story which its proponents are now seeking to export to other countries, and connect with existing global systems. The difficulties that foreigners in India encounter when using it, however, belie its spirit of inclusivity. At the G20 Summit this year, DPI was a central focus. At a side event preceding the Delhi leaders’ meeting, G20 Digital Economy Ministers recognised its importance and published the G20 Framework for Systems of Digital Public Infrastructure, later endorsed in the G20 Leaders’ New Delhi Declaration. Read the full article here.

Flawed regulation can undermine the digital payment ecosystem

Anupam Manur writes in Hindustan Times on why the limits placed on Unified Payments Interface (UPI) transactions for third-party apps by NPCI is flawed.Systemic risks are automatically lower when consumers, merchants, and third-party app developers are all multi-homing, meaning they simultaneously use more than one app for the same purpose. The UPI ecosystem is radically substitutable. In the case of failure, consumers and merchants can switch from one app to another without the slightest friction. Though two apps, PhonePe and GPay, dominate the UPI market (with roughly 80% of UPI transactions), consumers are not without choice — there are at least 52 UPI service providers, 189 issuers and around 21 third-party apps. Third-party app developers also can and do have tie-ups with multiple banks simultaneously, such that the YES bank-PhonePe fiasco will not be repeated.Beyond being unnecessary, the rule is also improper, incomplete, and inconsistent. If the aim is to mitigate the systemic risk of failure of one big market player, the rule change should apply to all apps providing UPI services, and not just third-party apps. Is the systemic risk different when the app of a scheduled commercial bank fails as against a third-party app?The entire article can be accessed here