UPSC Prelims 2017 · Question 68 of 99
UPSC Prelims 2017 question on UPI Consequences
- ExamUPSC CSE
- Year2017
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicBanking
- DifficultyMedium
- TypeDirect
Which of the following is a most likely consequence of implementing the ‘Unified Payments Interface (UPI)’?
Show answer
Answer: A. Mobile wallets will not be necessary for online payments.
Verdict
The answer is that mobile wallets will not be necessary for online payments.
Analysis
The Unified Payments Interface allows money to move directly between any two bank accounts using a smartphone, letting a customer pay a merchant online or offline without entering card details, IFSC codes or net banking and wallet passwords. Because the bank account itself becomes the payment instrument, the intermediate stored value wallet loses its purpose. The remaining options overstate wildly: currency displacement within two decades, a drastic rise in foreign investment and effective subsidy transfer are consequences of other instruments or of nothing at all.
Source
The Hindu explainer on the Unified Payments Interface.
How to crack it
The stem asks for the most likely consequence, so rank options by causal proximity rather than by desirability. A payments interface acts first on how payments are made, then on the intermediaries in that chain, and only distantly on macroeconomic aggregates. Note also that direct benefit transfer runs on the Aadhaar enabled payment infrastructure rather than on this interface, which is the distinction the fourth option exploits.