Rationing on UPI Transactions, and market share at 33%.. Protectionism at what cost Efficiency, Competition or Capital?
I feel we should have better monitoring and regulations than restrictions. DigitalTransactions have increased/increasing but that doesn’t mean it has reached to everyone, there is still a huge untouched market to explore.
Whether we agree or not Cashback was/is the biggest reason for UPI or any digital payment adoption and growth. The market is just warming up to digital payments and these restrictions will do more bad than good. With such restrictions, these players will not be able to onboard tier 3 onward customers who will seek to maximize their benefits through Cashbacks.
I think we should not have problems in allowing unrestricted UPI transactions because of below 2 points:
1. UPI being interoperable and Bank to Bank so even if any company closes down/wraps up, absolutely nothing will happen to the payment ecosystem
2. We have anyways mandated all companies to process and keep the payment data in the country. We may think of such restrictions after 5 years, but definitely not now.. What could be the reason for this Rationing? Am I missing anything? Please explain. FinTech, digitalpayments, UPI, payments, NPCI