Moneycontrol Pro Panorama | Digital public good, at whose expense?

Dear Reader,

The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

After all the hullabaloo over levying charges for the hitherto free unified payments interface (UPI), the Ministry of Finance put the matter to rest, at least for now. Their reason: the financial platform is a “digital public good” (DPG).
The UPI transactions are quickly spreading across the financial ecosystem and finding huge acceptance among businesses and customers. The technology enables a customer to not only shop but also set recurrent transactions such as mobile and electricity bills, insurance and mutual funds payment, loan EMIs and entertainment subscriptions. It scores over credit/ debit cards and bank transactions because UPI is free for all customers, the merchant and the app service provider.

But there is a cost involved in the process. And, as the service is increasing in popularity, the associated costs are also increasing. Who bears this cost? For now, the government provides a certain sum to promote digital payments and support the system. Is this model sustainable and for how long? A column by Prosenjit Datta points out that UPI’s rising popularity is also making it expensive and the government will be forced to rethink its free-for-all strategy even though it's a digital public good.