India’s Unified Payment Interface (UPI) is an example of how an innovative payments and settlement system can initiate an economy wide transformation. In its structure and operations, it also demonstrates the extraordinary potential of technology, even as it adopts and adapts existing processes rather than inventing new ones. Its powerful contribution perhaps also lies in an underlying philosophy on how it should be used and for what purpose. Flanking policies and supportive administrative measures can in turn amplify its impact, as India’s experience of the past twenty years or so have shown.
The nature of this transformation is extraordinary, even as it has yet to gain the traction, range and depth needed for any definitive judgement on whether it represents a true and consolidated structural transformation.
Although the UPI system is associated in the public mind with what people are witnessing, and in many ways is the key to a process that has induced a wave of other developments, questions remain about the extent to which the UPI system is responsible. Indeed, as this paper will show, it is difficult to disentangle the exact channels through which this process is unfolding, or indeed where its origins lie.
