The Regulated Revolution: UPI and the Evolving Legal Landscape of Digital Payments in India – A Human Rights Perspective on Issues, Challenges and Regulatory Responses
Keywords:
UPI, Digital Payments, Fintech Regulation, RBI, NPCI, Data Protection, Human Rights, and Digital Inclusion.Abstract
The Unified Payments Interface (UPI) has transformed the digital payments landscape in India, boasting the highest number of monthly transactions in a public digital infrastructure globally, at 10 billion. But the law has been unable to catch up, posing a major problem in terms of regulation. In this context, this paper critically examines the development of digital payments in India in the context of UPI including the legal framework of Payment and Settlement Systems Act, 2007, role and activities of the National Payments Corporation of India (NPCI) and UPI's relationship with data protection, competition and liability laws. The paper addresses several key issues such as data localization and cross-border data flows, anti-competitive practices in a concentrated market, merchant discount rate rules, liability for unauthorized transactions, and the legal nature of the recurring payments. The Indian 'sandbox' approach to innovation is the right one, but a broad and comprehensive algorithmic liability regime, systemic risk, and user privacy regime are long overdue. Based on judges' experience, regulatory measures, and EU, China, Singapore, and Brazil's experiences, the paper presents a specific Digital Payments Code. Importantly, the paper embeds these regulatory hurdles in human rights jurisprudence, taking a closer look at how digital financial inclusion relates to constitutionalism safeguarding dignity, equality, privacy and non-discrimination, and advocating that the right to access digital payments be considered an emerging socio-economic right.
References
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