In a recent development, Mastercard’s Chief Financial Officer (CFO), Sachin Mehra, shared his insights on India’s Unified Payments Interface (UPI). While he described UPI as “impressive on multiple fronts,” he also expressed concerns about the challenges and financial losses experienced by participants in this ecosystem.

Mastercard CFO’s Perspective on UPI:

Speaking at a UBS conference, Sachin Mehra acknowledged that the UPI system has shown remarkable growth and innovation. However, he emphasized that it can be an “incredibly painful experience” for those involved, often resulting in financial losses for ecosystem participants.

This isn’t the first time Mastercard has expressed concerns about UPI. Earlier in May, Mehra raised questions about the long-term sustainability of the model, noting that banks facilitating these transactions frequently incur losses. He mentioned that it remains to be seen where this trend will lead, and in the meantime, debit and credit transactions continue to thrive in the Indian market.

Impressive UPI Growth:

Despite these concerns, UPI has achieved significant milestones, surpassing 10 billion transactions in August and maintaining its momentum with 10.56 billion transactions in September. While the increase in transaction value was marginal, the system still reached a substantial Rs 15.8 trillion in September, up from Rs 15.76 trillion in August.

READ MORE: IMF Raises India’s Growth Forecast To 6.3% For FY24: World Economic Outlook.

Data from the National Payments Corporation of India (NPCI) reveals impressive year-over-year growth, with a 56% rise in transaction volume and a 41% increase in transaction value compared to the same period in the previous year. India is experiencing a growing trend in digital payment methods, with 42% of consumers expressing a preference for UPI during online shopping in the festive season.

In Conclusion:

Mastercard CFO Sachin Mehra’s comments shed light on the complexities and challenges of India’s UPI system, despite its impressive growth. UPI continues to play a significant role in the Indian digital payment landscape, with consumers increasingly favoring this platform for their financial transactions.

As the digital payment ecosystem evolves, it remains to be seen how UPI will address the concerns raised by stakeholders while maintaining its position as a preferred payment method for millions of Indians.

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