22B transactions a year mean an average of ~700 QPS for the NPCI switch. Of course the traffic is not uniform, it probably peaks at many times that number, but that still doesn't sound that bad - for comparison, a quick Google tells me Nasdaq TotalView ITCH feed peaks at 100k+ QPS at market open.
It is practical. When mobile wallets was taking off a lot of people starting pitching "blockchain technogloy" in fintech and said decentralization needs to be the foundation for everything. The whole process largely become about technogical philosophical discussion about decentralization, p2p, intermediate crypto transactions, stablecoins etc. A lot of consulting firms made a shit ton of money while at the end of the government agencies and banks was scratching their head trying to find out how they "invested" millions without an iota of progress in terms of product development. The conclusion largely was fintech innovation should not be led with governments.
If you look at very large scale IT infrastructure engineering, a lot of times those technologies are developed and sold to governments by US or west EU government controled or influenced companies that does impose to some degree to the sovereignty aspect of a government.
So, with decentralization discussion most government lost a ton of money to consultants. They could wait for to buy off the shelf software that comes control risk. Or they could accept the risk and limitations and build a software that works now.
I think india made the right choice to build a system on framework that is proven and predicatable.
I have the utmost respect to people who makes UPI work. Made even the old people in the nation completely go digital for payments - a feat unparalleled in the world.
How is this different from Alipay/WeChat Pay in China? Handling transactions of this volume is an amazing technological feat, kudos to the team! However, I don't think this mobile QR code paying system is anything novel. Alipay rose to popularity much earlier (I can't recall exact when, but it was already super popular in ~2010, and definitely ubiquitous by 2015).
Great article. I would love to see a similar article about how POS credit card / debit card payments work in the US/Europe, depending on whether you use the card's magnet stripe, chip or your phone (Apple Pau/Google Pay/…) to pay.
Yes, UPI works. But it's a terrible system for privacy and autonomy. It has so many intermediaries, requires phone number and linked to person's identity. It should not be called a peer-to-peer payment system in anyway. It is controlled by the government rather than Visa or Mastercard. That's the only the difference.
For those outside India and/or non-active users of UPI - it drives so many transactions that even for an engineer, I forget how often I use it:
- Payments between family members
- Payments for every tiny/small item - a bag a chips or a cup of tea for example
- Payments for car mechanic, plumber, or other services
- Payments for online shopping or services - yes web apps show the UPI QR code and I can pay from my phone by scanning. Mobile apps will simply open the UPI app's payment screen
- Buses, flights, trams, taxis, trains - online or on road
On an average day in a city like Kolkata, me and my partner make up to 20-30 transactions. I live in a small Himalayan village most of the year and I still make roughly 6-8 transactions a day.
So? Read the article, and? Some pretty basic payment flows.. Nothing about settlements, payment card messaging flow (you see a simplified logic in the article), nothing about other payment rails.. Come on.
I can sense Claude behind all interactive graphics here, yet it apparently does great job to further make the point and interestingly TimesOfIndia is a major media outlet.
22 comments
[ 9.5 ms ] story [ 140 ms ] threadIf you look at very large scale IT infrastructure engineering, a lot of times those technologies are developed and sold to governments by US or west EU government controled or influenced companies that does impose to some degree to the sovereignty aspect of a government.
So, with decentralization discussion most government lost a ton of money to consultants. They could wait for to buy off the shelf software that comes control risk. Or they could accept the risk and limitations and build a software that works now.
I think india made the right choice to build a system on framework that is proven and predicatable.
Excellent engineering.
I only wish more countries would implement something like UPI in other countries and get rid of inferior and broken solutions like crypto.
I just wish it had a tooltip because its purpose was not immediately clear (CR/BN is a bit cryptic).
Also, great website and layout, very respectful of the reader. Clean and with zero distractions.
Are there any reason why we can't have a global UPI system? Open Source with each Government running their own instances.