I understand the confusion, but just to clarify I'm a big fan of UPI :).
Now, is it good move for the people? It's a complex topic, one could write a lot about it. This move will push people away from cards because card tokenization won't be supported for a while, making recurring payment harder. It's well known that very small amounts of friction can drastically reduce the conversion rate. Entering the card details every time is a hassle for sure.
So more UPI payments. But today there are no MDR for UPI transactions, meaning fintechs and banks are losing money when they process these transactions. For banks, it's supposed to be ok because a digital transaction is cheaper than a physical one. For fintechs, this is tough, you need to find money somewhere else. So less money = less incentives = less innovation. However there have been talks to put back some fees on UPI (banks are pushing a lot on this).
On the other hand, more card payments = higher MDRs. So merchants or customers, or both, will pay more to process the transactions. Banks and fintech get more money. But with a lack of competition, because of the current duopoly (Visa/Mastercard), and the difficulty to enter the market due to strict regulation, innovation is far from its peak. Just by looking at how long 3DS2 takes to roll out you can see that there is a lot inertia.
It's not black and white, as often. Personally I think UPI is a better direction. The only downside is that's it is only for domestic payment. I'd love to see an EU initiative as successful as UPI: instant payment could be the EU equivalent but the fees are crazily high in some countries.
