UPI, which stands for Unified Payments Interface, is an instant real-time payment system developed by the National Payments Corporation of India for fast transactions between users and merchants that makes things a lot easier for Cashless Transactions and keeps detailed records about all transactions. But there is a critical flaw in the model of UPI which is that it has no fees at all which is terrible for the Banks as they can't charge fees from the Merchants or the Users for developing this technology so banks are now facing a dilemma of whether they should invest their time and money into UPI or just look for something else.
There is no doubt that the launch of UPI surged a new wave of Fintech Companies that made quite progress in this new method of Money Transfer but it has also come to notice that more than often Banks are very hesitant to deploy their resources to develop the UPI technology and because of that, we have seen there being delays in Funds Transferred or just simple decline of the transaction from Bank and several other instances.
So now there is a gap between NPCI and all the Banks as NPCI wants Cashless transactions to be at an All-Time High while Banks just want to get paid which they aren't right now as there are no transaction costs associated with UPI. So I feel like the government of India should come up with some way to get the Banks paid or we might see the collapse of UPI as Banks won't develop the technology on their end so what would be the use of UPI without the actual Tech behind it?