UPI One world: Technology challenges – Industry News

– By Manish Kumar Shukla

The Unified Payments Interface (UPI) has emerged as a game-changer in the world of digital payments, revolutionising the way people transact in India. With over 11 billion transactions valued at Rs 17 trillion in October 2023, the UPI platform has witnessed exponential growth and adoption. The UPI One World Initiative is a significant step towards making UPI a global phenomenon. However, as the initiative expands its horizons, it faces several technology challenges that need to be overcome to ensure its success.

The UPI One World Initiative aims to extend the reach of UPI to other countries, enabling seamless payments by foreign nationals visiting India, promoting financial inclusion adding to the convenience of foreign tourists in India. While the vision is promising, it comes with its set of technology challenges that require careful consideration.

1. Compliance and Regulation: The initiative must navigate the complex web of international regulations and compliance requirements. It involves adhering to multiple data protection and financial laws, which vary from one country to another.

2. Security and Fraud Prevention: Expanding UPI to a global audience demands robust security measures to protect sensitive financial data and prevent fraud. Coordinating these measures on a global scale while maintaining efficiency is a significant challenge.

3. Scalability: The existing UPI infrastructure is primarily designed to cater to the Indian market. Expanding this infrastructure to accommodate a global user base requires significant scalability in terms of software, and network and partner bank levels.

4. Currency Conversion and Exchange Rates: Managing currency conversion and exchange rates in real-time is vital for cross-border transactions. Payment wallets need to provide users with transparent and competitive rates, which can be a complex task. Maintaining transparency in charges and providing real time money loading facility to the wallet pose significant challenges. 

5. Refunds, Withdrawals and reversal: While the one world wallets are meant to be used while the foreign travellers are in India, the remaining balance can be transferred back to source on the request of the user, refunds from the merchants, disputes and payment reversals add to the challenges here. 

6. International Phone numbers: The aim here is to allow foreign travellers to get access to UPI with their international phone number essentially asking all receiving banks to recognise international phone numbers as valid identifiers. Also, the telecom issues which arise in the process of sim binding are significant hassle.

7. User Experience: To gain global acceptance, the UPI One World Initiative must offer a seamless and user-friendly experience. Ensuring consistency in user interfaces and functionality for users coming from varied cultural and technological backgrounds is challenging.

8. Payment System Downtime: UPI has set a high standard for reliability, with minimal downtime. Maintaining this reliability for a global audience is challenging as these users might not have any other alternatives to pay. 

Addressing these technology challenges in the UPI One World Initiative is crucial to its success. To overcome these obstacles, a collaborative approach involving RBI, NPCI, and technology companies is essential. This initiative represents a massive leap forward in the world of digital payments, promising to redefine cross-border transactions and financial services.

Final Thoughts

The UPI One World Initiative is an ambitious project with enormous potential, but it also presents formidable technology challenges. With a strategic and collaborative effort, these challenges can be addressed, paving the way for a more connected and inclusive global financial landscape.

(Manish Kumar Shukla is the Co-founder of CheqUPI.)

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