UPI Wallet cleaner or not

The Unified Payments Interface (UPI) was launched on 11 April by RBI Governor - Raghuram Rajan. UPI,
launched by the National Payment Network Company (NPCI), will enable users to make cashless
payments online and 24/7. UPI will make it easier for people to carry out online transactions and will
reduce the number of wallets that need to be managed.

As of now, 19 banks have partnered with NPCI, an umbrella organization for all retail payments systems,
to offer services based on UPI. NPCI has been working on UPI since February 2015. The new interface is
built on the same infrastructure as the Immediate Payment Service (IMPS), which is currently used by
banks for real-time transfer of cash.

The introduction of UPI has stirred the pot and a lot of speculations are being made about the future of
mobile wallets. A recent report by Centrum Broking has stated that mobile wallet services like SBIs
Buddy, ICICI Banks Pockets, HDFC Banks Chillr and standalone operator Paytm will be redundant with
the massive adoption of the UPI.

However, there are other experts who see UPI helping the mobile wallets in multiple ways. According to
these experts, mobile wallet companies may benefit from UPI due to their friendly user interface, user
experience designs and also because of lower transaction costs once UPI is adopted in large scale. UPI
will make it easier and cost effective for consumers to load cash onto the wallet, and that in turn would
benefit the wallet payment ecosystem.

It remains to be seen what will come out of this UPI debacle. But one things is for sure. This will bring
more transparency to Indian Financial System as well as extend the reach of banking services to more
people in rural and far flung areas.