In India, the cost of instant payments is exactly zero. Additionally, RuPay cards have a Zero MDR which has really really made Visa and MasterCard angry
I actually had the privilege of attending a seminar by the NCPI guys and someone did ask this question. The answer is different for different players in the ecosystem. But fundamentally, the actual cost per transaction is so low that it really does not matter. Visa/MasterCard are rent seeking parasites.
For the apps like GPay and Amazonpay, yes it is data. But of course there is the reference implementation app that does not do any of that. People just prefer the other apps because they offer good cashbacks.
For the banks, it's a service they offer, just like having a website and passbook updation. No customer is going to go to a bank without a website and now the same applies for instant transfer.
I hope it works out in the long run. I've seen a version of "banks do payments" before and while it started well, other banks started doing their own thing with quality degrading, and merchants needing to support more options. Until we got to the absurdity of "here's a grid of 30 bank icons, try to find yours"...
> "here's a grid of 30 bank icons, try to find yours"...
UPI exists to solve precisely that problem. It forces everyone to use a common interface. Customers can use any app they want to access the API. They don't depend on the bank for anything except the actual Credits and Debits in your account.
