Instore Debit Card payments at POS are faster. They don\u2019t require Payer to have anything except the Debit Card. All of the other infrastructure required to process the payment are made available by the Merchant.<\/p>\n
In the case of instore UPI payments via Mobile Wallet, the payment is slower, is subject to availability of Internet, requires some degree of app savviness on the part of the Payer. Besides, except the Merchant\u2019s QR code, all of the other infra needs to come from the Payer.<\/p>\n
Therefore, given a choice, I suppose a vast majority of Payers (i.e. Consumers) would prefer to use Debit Card rather than Mobile Wallet UPI. To that extent, it might be difficult for UPI to completely replace Debit Card.<\/p>\n
But, then, the Payer may not have the choice.<\/p>\n
Many Merchants may think, Mobile Wallet UPI is available with most Consumers, so why should I incur the cost and hassles of POS, etc. As a consequence, Merchants may replace Debit Card with UPI and simply tell consumers that they don\u2019t accept Debit Card anymore.<\/p>\n
Of course, this assumes that it\u2019s easier for a Merchant to get a Merchant Account for accepting UPI payments compared to a Merchant Account for accepting Debit Card payments. I know that it\u2019s not so easy for a broad swathe of Merchants to get a Merchant Account for accepting Debit Card. But I don\u2019t know how hard or easy the equivalent process for accepting UPI is. But, judging by the number of micro-Merchants who sport the UPI QR, I think the above assumption is a fair one to make.<\/p>\n
For the uninitiated, Merchant Account is a type of account \/ agreement issued by a PSP (Payments Service Provider) that enables a Merchant to accept Credit Card, Debit Card or UPI (and other digital) payments.<\/p>\n
UPDATE DATED 12 JUNE 2020:<\/p>\n
While UPI has gained traction since the time I wrote the above answer, it has not replaced Debit Card or POS.<\/p>\n
In fact, the number of POS terminals in India has nearly trebled to 4.25M in the last four years.<\/p>\n
\nAt the peak of re\/demonetization, a govt honcho predicted that POS machine will be dead in India in 3 years. 2 years later, the count of POS has shot up from 1.5M to 4.25M. This is going to be the most harebrained prediction of all times! https:\/\/t.co\/aDtFMsXQwr<\/a><\/p>\n
— GTM360 (@GTM360) November 11, 2019<\/a><\/p><\/blockquote>\n