Building Digital Payment Products in India: Lessons from the UPI Revolution

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# Building Digital Payment Products in India: Lessons from the UPI Revolution

India's digital payments ecosystem is a product management masterclass. From studying fintech at IIM Calcutta and working with financial services clients, I've observed patterns that every payment product builder should understand.

Why India's Payment Stack is Unique

India didn't just digitize existing payment rails — it built new ones from scratch. The India Stack (Aadhaar, UPI, Account Aggregator) created infrastructure that leapfrogged traditional banking.

Key differentiators:

Interoperability by design, not afterthought

Public infrastructure with private innovation layer

Mobile-first from day one

Inclusion as a primary goal, not secondary benefit UPI processed over 10 billion transactions in a single month in 2023. No other country has achieved this scale of real-time payments.

Product Principles from UPI's Success

Several product principles drove UPI's adoption:

1. Simplicity at the core

UPI's core proposition is simple: send money using a phone number or QR code. Everything else is built on top of this foundation.

2. Zero-cost transactions

By making person-to-person transactions free, UPI removed friction that would have slowed adoption. The business model came later, built on top of massive usage.

3. Open architecture

Any bank or fintech can build on UPI. This openness created an ecosystem of innovation that a closed system couldn't achieve.

4. Trust through familiarity

UPI apps feel like messaging apps. The UX borrowed from WhatsApp-style simplicity, making payments feel as easy as sending a text.

Challenges for Payment Product Builders

Building payment products in this ecosystem presents unique challenges:

Standing out in a commoditized market: When the underlying rails are identical, differentiation must come from UX, trust, or value-added services.

Fraud and security: Real-time payments mean real-time fraud. Product teams must build sophisticated detection without adding friction.

Merchant acquisition: The B2B side of payments is harder than consumer adoption. Building a merchant network requires different muscles.

Regulatory complexity: NPCI guidelines, RBI regulations, and data localization rules create compliance overhead that products must absorb.

The Next Wave: Embedded Finance

The future of digital payments in India isn't standalone payment apps — it's embedded finance.

Where payments are heading:

Credit at point of sale (Buy Now Pay Later)

Insurance embedded in transactions

Investment products within banking apps

Cross-border payments via UPI rails For product managers, this means thinking beyond the transaction to the entire financial journey.

Building for Bharat

The next 500 million digital payment users in India will come from smaller towns and rural areas. Building for them requires:

Vernacular language support

Offline-capable transactions

Voice-based interfaces

Agent-assisted models The UPI revolution started the journey. The next chapter will be written by products that truly understand Bharat.

From Quality Engineering to Product Management: A 10-Year Transition

Sambit skipped presentations and built real AI products.

Sambit Kumar Das was part of the January 2025 cohort at Curious PM, alongside 13 other talented participants.