If UPI Is Free, Who Pays for It? | PhonePe, Razorpay & NPCI | WTF is Payments?

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WTF is with Nikhil Kamath

If UPI Is Free, Who Pays for It? | PhonePe, Razorpay & NPCI | WTF is Payments?

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We scan a QR code, enter a PIN, and move on. I wanted to understand everything that happens in between. If a payment feels instant and costs us nothing, who is doing the work, who is taking the risk, and who is paying for it?


I sat down with Sameer Nigam of PhonePe, Harshil Mathur of Razorpay, and Sohini Rajola of NPCI to follow a payment through the system. We draw out the journey between an app, the banks and NPCI, get into why the confirmation on our phone and the settlement between banks are different things, and compare that with what happens when we use a credit card. From rewards and merchant fees to fraud, failed transactions and the cost of handling cash, there is a business behind every way we choose to pay.


The conversation also gets into MDR, how the ecosystem funds itself, and what it takes to keep investing in wider access. Then we look ahead: cross-border payments, business payments, wearable rings, digital tipping, and AI agents that might eventually shop and pay for us. The guests disagree on how quickly that future arrives, especially in India.


If you were starting a payments business today, which problem would you try to solve? Watch the full conversation and tell me below.


TIMESTAMPS

00:00 Introduction

02:23 Sohini Rajola: Her journey and NPCI's role

09:40 Banks, fintechs and digital banking

14:11 Harshil Mathur: The problem that led to Razorpay

20:36 Sameer Nigam: His journey before PhonePe

24:08 Why young Indians want to leave

30:28 UPI's early builders and the cost of overregulation

43:16 Flipkart's payment failures and the birth of PhonePe

52:02 How a UPI payment actually works

59:06 If UPI is free, who pays for it?

1:05:26 Instant payments vs bank settlement

1:08:24 Stablecoins, CBDCs and the future of money

1:14:52 Wealth inequality, inheritance and capital gains

1:17:11 The zero-MDR debate: Funding the payments ecosystem

1:21:31 Should UPI apps have market-share caps?

1:33:08 Can new banks and startups compete in India?

1:41:18 How card and merchant payments work

1:49:39 Credit-card rewards and RuPay on UPI

1:54:12 How Razorpay improved online payments

2:02:08 The B2B payments opportunity

2:05:36 Building payments for medical tourism

2:09:54 Why digital tipping is still unsolved

2:16:01 What payment data reveals about India's consumers

2:21:22 Trust and India's next wave of online shoppers

2:26:07 GST, consumption and property taxes

2:31:38 Affordable food, quality and accountability

2:37:55 Cash vs digital: Measuring India's spending

2:42:20 B2B payments, merchant data and access to credit

2:44:31 Stablecoins, cross-border transfers and capital controls

2:51:59 Will AI agents change how we shop and pay?

2:57:57 Is AI in a bubble?

3:03:01 AI costs, productivity and human work

3:08:59 What should young founders build for AI commerce?

3:16:01 Who benefits from AI? Business and investment opportunities

3:24:31 Meet the builders: Seven, Dodo Payments and PayGlocal

3:26:46 How cross-border payments and merchant-of-record models work

3:34:55 Stablecoins and CBDCs: Speed, trust and regulation

3:39:20 The founders' view on competition and market share

3:41:31 Seven's payment rings: Cashback, revenue and adoption

3:47:20 Medical tourism and other cross-border opportunities

3:51:07 Tap-to-pay, tipping and the future of wearables

3:53:48 Cheaper AI and the pace of agentic commerce

3:56:47 Fraud, trust and safeguards for AI payments

3:59:18 Final advice for young fintech founders


GUESTS

Sohini Rajola – Executive Director, Growth at the National Payments Corporation of India (NPCI)


Sameer Nigam – Founder and CEO of PhonePe


Harshil Mathur – Co-founder and CEO of Razorpay


ALSO FEATURING PERSPECTIVES FROM

Vijay Khubchandani – Founder & CEO, Seven


Prachi Dharani – Co-Founder & CEO, PayGlocal


Yogesh Lokhande – Co-Founder, PayGlocal


Ayush Agarwal – Co-Founder & CPTO, Dodo Payments


HOST

Nikhil Kamath – Co-founder of Zerodha and Gruhas; Host of 'WTF Is' & 'People By WTF' Podcast.


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