The above is the explanation to inter-bank settlement processes. This is a 3-part article and links to the other parts are available therein. It gives a nice overview of UPI as implemented by NCPI in India.
My question is what constitutes a settlement failure? How does this affect customers and banks?
In my personal experience, sometimes payments can take up to 3 days to succeed. Is it anything to do with inter-bank settlements?
Or is it that the sheer volume of such incomplete or delayed payments actually constitutes inter-bank settlement failures?
RBI also has introduced CDBC to address the problem of settlements. But I'd like to understand settlements is a problem first, before I understand how CDBC will help with settlements.
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