Ateesh: While, let’s say, the amount of cash in circulation—notes in circulation—is only Rs 34 to 35 lakh crore. However, every one of those notes is unique. UPI transactions, on the other hand, represent the velocity of money. That means that if the four of us were to take a Rs 100 note, and I were to give Praveen Rs 100, and then Praveen were to give you Rs 100, Rohin. And Rohin were to give Alok Rs 100, and then back to me in UPI, that would actually represent Rs 400 worth of transactions. But in reality, the value being moved is only Rs 100. When you actually try to net that off across the value of these 250 lakh transactions, you’ll find that in reality, it represents much less than the cash in circulation.

Alok: …and there was, of course, a huge backlash [to the GST notices], and a lot of the notices were withdrawn. But I think the government made it very clear that, “Guys, you know, you’ve made enough money. We can tell how much money you have now made. We want to bring you within the tax net.”

In some ways, this got me thinking. This conversation would not have been possible without UPI, right? Okay, now we’re seeing the tail end of it, but think back to how much formalisation has probably taken place. Think back to how much money is now within the tax net. And I’m coming at this from the point of view that sometimes, when we draw a balance sheet of the costs and benefits of a measure, we don’t tend to draw a comprehensive balance sheet.  

Ateesh: These are fees that are charged by the owner of the switch, and the owner of the switch is the National Payments Corporation of India (NPCI). So when you are looking at NPCI’s revenues, their revenues basically come from using NPCI infrastructure; in this case, for UPI, it is using the IMPS switch. Right? There’s like a national switch, which is fine. It’s not a huge amount. But I’m just trying to tell you that’s one of the reasons why NPCI is able to declare—you know, I want to call it profit, as you rightly said—but a kind of turnover or contribution, or whatever you like to say… earnings.

Rohin: If they’re sitting on Rs 1,500 crore of a surplus, even if it’s not a profit, and much of that comes from charging a very small amount on the transactions that are going back and forth—would I be wrong in assuming that they’re charging more than they need to? Or that their technology costs are not as much as what they’re charging for?

Ateesh: That’s correct. So what happens is, there’s a maintenance cost. Now the question you have to ask yourself is, if NPCI is maintaining the switch, if NPCI is the ombudsman for the UPI network—because UPI is a network, it’s a rail, right? It’s a payment rail, a messaging rail—then, it begs the question, can they do more?