As an Indian Bitcoin user who recently returned home, I found myself using UPI digital payments frequently for everyday spending.
UPI (Unified Payments Interface) is a bank-to-bank payment system in India that has become ubiquitous for making payments by scanning QR codes or using phone numbers. It has enabled even street vendors and small shops to accept online payment.
Due to the difficulty of obtaining cash change and the need for sellers to hold card machines, UPI is often the only payment option.
And I must admit; It is fast, cheap and easy to pay merchants through UPI apps compared to fumbling with Bitcoin Lightning wallets, whether custodial or non-custodial. Funds are transferred instantly and free, and the process is familiar to all parties.
Although I have a keen interest in private money and censorship-resistant decentralization, the ease of use of Bitcoin and UPI is hard to ignore. UPI processes over 14 billion monthly transactions across 450+ banks without fees.
In comparison, Lightning deals with low liquidity, channel balancing issues, and difficult user experiences (which continue to improve with custodial wallets with some trade-offs).
Naturally, the privacy implications of an almost entirely digital system controlled by centralized third parties leave me frustrated and miserable. But most Indians happily compromise privacy for convenience time and time again.
So, even as a Bitcoin user, I can’t see most Indians ditching the UPI interface to start using Bitcoin Lightning en masse for everyday payments anytime soon, regardless of Bitcoin’s circular economics. The motivation has to be there. And let’s be honest – lightning still confuses Bitcoin users, not to mention my uncle!
Perhaps in the future, privacy concerns or currency devaluation may push Indians towards paying in Bitcoin. But right now, UPI has a lot of momentum and network influence.