I have said in previous blogs that the microwave culture is over & we are in the touch of a button culture but we are now in the new web 3 age as the age of web 2 comes to an end & with the emergence of any age such as the Industrial Revolution, mass production, a shift from the Roman road network & horseback which was the platform agrarian North America used to build North American cities with railroads locomotives, buses, automobiles & planes came the replacement of artisans such as bakers & the need to re-skill & operate machinery, the new era of web 3 in somewhat of a like manner introduces a real concern as India emerges in the new dawn of the web 3 era as the first nation to be a cashless society with 93% of Indians using cashless payment methods & in past blog posts I have said that whilst web 3 ushers in huge benefits cash backed by gold still has its place so the proper balance is key, gold ushered in its decentralization of its day much like Bitcoin in 2008 but gold & cryptocurrency share a common denominator who is a common enemy named centralization.
Universal Payments Interface or UPI was introduced by the National Payments Corporation of India (NPCI) in 2016 which is an umbrella organization governed by the Reserve Bank of India which is a central banking authority, NPCI oversees India's retail payment systems.
UPI rapidly amassed widespread adoption as being near costless & a proficient real-time payment system, popular UPI apps include PayTM. In this touch-of-a-button culture in the new web 3 age the UPI-Web3 compatibility could revolutionize global payments & shape the global digital payment infrastructure.
A Closer Look At Universal Payments Interface Applications
From ordering pizza online, ordering groceries online every week & ordering a gift online such as a birthday present in the nation of India the popular route is to use Universal Payments Interface applications where users can also transfer money between their bank accounts across a single window, users of UPI apps can scan a quick response code (QR code) to pay another individual or a merchant/service provider
Users of UPI apps are not charged for use of the application & benefit from cashback & discounts when transactions are made via the UPI app. UPI apps generate income from fees they charge brands & service providers who promote their products.
Users of UPI apps have the ability to quickly move their money from one bank account to another bank account & transfers are instant.
UPI apps generate commission income by charging brands a fee so brands can promote their products.
Payment Interoperability
Google Pay & Phonepe are both examples of UPI apps & a user of Google Pay can send a money transfer to a user of Phonepe. UPI apps do not require senders & recipients to have the same UPI app so a sender using Google Pay is not restricted to recipients who must be registered Google Pay users to be able to transfer money.
Downside of UPI Apps
UPI apps collect user data, analyze user data, identify user spending patterns & preferences, one way is via QR codes, for instance businesses allowing customer payment using quick response codes gives the merchant customer information so that a business can make suggestions to the customer which is one example of online personalization User I.D is linked to a user's bank account & phone number.
User data collection is another way UPI apps generate income which is called data monetization. User data analytics helps UPI app determine user behavior & then offer users personalized services. UPI apps use data from their users to partner with third parties & sell user data to third parties which is concerning when personal data is in the hands of data brokers which leads to personalized ads & even suggested content showing up in your social media feeds but when it comes to web 2 algorithms determine what content you can see & what content you cannot see, web 3 on the other hand puts users in control of their data & UPI integration of web 3 has the potential to revolutionize the infrastructure of digital payments & virtual money given the fact that without an internet connection the version of UPI Lite enables small transactions to be sent offline
UPI, Crypto & Web 3 Integration
UPI is leading India on the path to a cashless society & UPI apps that integrate cryptocurrency & web 3 what would it mean? Not only would it be India's national solution to financial exclusion but UPI apps that integrate cryptocurrency & web 3 would expand beyond India and would be a global solution for financial exclusion.
UPI has already extended outside India into the United Arab Emirates & is collaborating with Singapore's PayNow platform as UPI seeks to become a global payment system by revolutionizing cross-border digital payments.
India's love affair with innovation created a natural byproduct of crypto adoption. Ongoing adoption of cryptocurrency has made a mark on India's financial landscape that cannot be erased, digital assets have gained widespread popularity amongst millions of Indians which has led India's very own crypto exchanges such as CoinDCX & the emergence of cryptocurrency traders in India.
BTC can be transferred to PayTM which is a popular UPI app.
Yuse Wallet have teamed up with a Netherlands-based business which brings UPI integration into India which creates simplicity in relation to cryptocurrency transactions.
Conclusion
The downside of UPI is data collection, the analysis of user data to predict spending patterns & third party access to user data but the days of privacy were over a long time ago & data collection, analysis of user data to make predictions, selling data to third parties which leads to personalization in the form of ads is a part of day-to-day life.
As India is a nation that is emerging as a cashless society & UPI extends outside India as much as I myself hold to the opinion that balance is healthy in the midst of rapid technological advancement & there should be cash backed by gold along with cryptocurrency in the same way that amidst this Tesla EV generation, a gasoline powered Corvette or Mustang would create a healthy balance but the reality is that technological change has been pushed or coerced to the extent that a healthy balance is seen as a stumbling block to advancement & what UPI will create is a lot of nations becoming cashless societies, some nations may be skeptical of CBDC but those nations are to a great extent cashless & whilst instant online transactions definitely are convenient cashless societies definitely is of huge concern but this is a touch of a button & a super highly tech savvy generation we live in & businesses adapt to these cultural shifts that's why quick service restaurants introduced kiosks & grocery stores introduced self service because there are people who hate wasting time in long slow-moving queues at checkout lanes & that's where UPI has potential but UPI as it extends outside India not only can potentially create cashless societies given that it was PayPal & Venmo which prepared North Americans for a cashless society but UPI compatibility with web 3 or decentralized UPI has the potential to bring physical shopping malls & department stores & human face-to-face interaction into extinction & usher in a new dawn of completely virtual shopping & bots. The potential success of UPI & if UPI does become popular in Europe & North America means the way the old payment method of writing a check went which is outdated in like manner online banking & debit card payments, credit card payments & even payment wallets would vanish. UPI is in some use in the United Kingdom the question is would UPI extend its use in some way into North America where 95% of the population use smartphones? But the day when it's possible to build a decentralized UPI app can revolutionize the online payment infrastructure but the downside of UPI is that it can create a cashless society which definitely raises concerns due to CBDC potentially jumping on the UPI bandwagon & in Canada cash transactions are the preferred payment method of a very slim majority who will be skeptical of UPI. UPI could potentially be alluring to North America's tech savvy & innovation-driven young people but for UPI to attract the North American market decentralized web 3 UPI would be a good route.
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