7 ms·

India rupee ban: Snapdeal to deliver cash

66 points by happy-go-lucky 10y ago

norswap 10y ago
What about smartphone powered payments?
- detaro 10y ago
  What about them?
- happy-go-lucky 10y ago
  Paytm? https://paytm.com/ https://paytm.com/
- Navarr 10y ago
  http://www.npr.org/sections/goatsandsoda/2016/12/21/506330351/india-wants-to-go-cashless-but-its-easier-said-than-done http://www.npr.org/sections/goatsandsoda/2016/12/21/50633035...
- dogma1138 10y ago
  Local smartphone based payments usually require a local bank account or a debit card; they often do not work with credit at all since they can't hussle commissions nor want to onboard the risk of dealing chargebacks or fund clearance. Local smartphone based payments also require infrastructure which is not always available in india, power and connectivity can be very spotty even worse than some places in Africa. Also with most of these micro payment services they don't really use new tech, a lot of the time it's still based on SMS and is rather insecure and prawn to fraud. You aren't going to be issuing smartphones with NFC and fingerprint readers and the terminals needed to accept such payments in impoverished regions. Anything like Google/Apple pay and you need a bank account which many of those peoples don't have or don't want to have/use, and the Government is unlikely to like a secondary economy like in some African countries which is based on cash bought prepaid call minutes which are then used as currency.
  - norswap 10y ago
    I'm confused. Isn't getting cash a problem only if you have a bank account?
    - dogma1138 10y ago
      The problem is that the cash was traded effectively outside of the economic system. In most countries Cash passes through banks or clearinghouses after a transaction is completed. Your employer pays you with a cheque or a bank transfer; you take out cash from the ATM; you buy groceries with that Cash; The store deposits the Cash at a bank or a clearinghouse and receives a cheque or has it's account debited. In this chain the majority of transactions; even cash transactions are "on paper", the problem with India is that people effectively trade with Cash without involving the banks; you get paid in cash (w/ no taxes paid); you buy something from the local grocer w/ cash w/o any recepiet; the local grocer pays their suppliers with cash again often w/o any receipts; pays their employees with cash and so on and on. This means that the majority of the transactions are in effect conducted in grey or black markets.
subbu 10y ago
Snapdeal is not going to win the e-commerce market by delivering cash. They are just deviating even farther from their goal: delivering goods. While Amazon continues to make micro optimizations to improve their service both Flipkart/Snapdeal have taken their foot off the peddle.
- amingilani 10y ago
  > Flipkart/Snapdeal have taken their foot off the peddle. Got a citation for that? > They are just deviating even farther from their goal: delivering goods. I thought the goal of any business was to make money. IMHO, since cash is such a sought after good in India at the moment, this is a clever way to monetize the cash they get from their Cash on Delivery service. It saves them the logistics of depositing large amounts of cash, while making more money.
- shripadk 10y ago
  I have to agree with you on this. Amazon India has a wide range of product selection compared to both Flipkart/Snapdeal. I can also import US products from Amazon.com (or Amazon US) and also their equivalent (but slightly smaller) "Global Store" in Amazon India. Flipkart had a golden opportunity to practically take over the e-commerce market in India. But they (like most other Indian companies) aren't/not willing to expand enough.
  - JumpCrisscross 10y ago
    > * But they (like most other Indian companies) aren't/not willing to expand enough* Could you expand on this?
    - shripadk 10y ago
      Sure. Flipkart and Snapdeal are not thinking (or have plans that they have declared publicly) of becoming Multi-Nationals to compete with the likes of Amazon and Ebay. Compare that with Alibaba which already has a US arm. I can, as an Indian, browse Amazon US shops and order from them (I of course have to pay shipping + duty on top of the original order). This isn't possible with Flipkart/Snapdeal. Even their local shops have lesser inventory and lesser options in comparison to Amazon India. Since India is a growing economy (and soon to be a less-cash economy), we will very soon get accustomed to purchasing goods and services online (like we did with mobile adoption). Once we do, there is no stopping us from purchasing goods and services from countries outside India as well (which was until recently just next to impossible for the lay man). Unless Flipkart/Snapdeal can cater to that market as well it's losing a big chunk of it's customers. India is definitely poised to become a booming e-commerce market in the future but it has no where near peaked for these companies to be content with. The consumer market is still heavily dominated by the US and European countries. If they do not expand they are doomed. And this is not restricted to e-commerce players alone. I notice this even with payment gateways / payment processors. We have quite a lot of payment processors that have a strong local presence. Some are even as good as Stripe (see Razorpay) when it comes to API and ease of implementation. But then again, they have no ambitions to expand to other countries. So India essentially has no access to an International payment gateway (Paypal doesn't count as it's only used for remittances. There is no equivalent of Paypal IPN/Paypal Express Checkout/Paypal Marketplace). To disrupt these companies, all it takes is for Stripe to open shop in India. Nobody would then have any incentive to use these payment gateways and they'll start seeing their market share diminish.
nautical 10y ago
Ola was also doing something on the same line .
- deleted 10y ago
  [deleted]
impy 10y ago
As a foreigner visiting India with the demonetisation is also not the most pleasant experience, I had landed on the day that happened. A lot of places luckily accepted credit cards, though in a few cases the authorisation failed (which can also occur at the ATM's, so be careful when queuing) and they don't always have the best infrastructure either (http://imgur.com/a/iJDfw http://imgur.com/a/iJDfw). PayTM isn't an alternative as a foreigner, since you can only charge your account with Indian issued debit or credit cards.
- wyager 10y ago
  The whole "demonetization" argument seemed blatantly propagandistic to me. The stated goal was to repatriate "black money" (theoretically large untaxed cash reserves held by rich Indians). Let's assume that "black money" is a real problem and not an overstated political bogeyman. Let's ignore the fact that the last thing anyone with serious money is going to store wealth in is cash (especially not Rupees). So you get rid of your largest denominations and what do these theoretical rich people do? They sell their cash at a slight loss for lower denominations. Poor (but still identified and banked) people can make a quick buck by trading all their cash for slightly more cash at the soon-to-be-useless denominations and trading them at a bank (under the allowed daily trade limits). On the other hand, anyone disconnected enough not to have an ID or a bank account but wealthy enough to have a few high-denomination bills gets screwed because changing money at the bank requires you to have an ID or an account. They can also sell their cash on the black market, but they get a worse deal because they're trying to hawk a couple bills, not the large bulk transfers that wealthy people are doing. And, of course, this move decreases the fungibility of Rupees and increases our expectation that the Indian government will do something similarly inconvenient in the future. If the Rupee ever hopes to be a strong currency, this probably didn't help. I suspect a secondary goal of this move was to initiate a migration away from cash. Once you get rid of cash and make all legal money banked, you can do all sorts of fun stuff like impose negative interest rates. The ECB, Denmark, Sweden, Switzerland, and Japan have already experimented with negative interest rates; I expect to see other nations make moves towards it as well. It's an effective way of doing things like propping up property values, as long as you can force people into it.
  - 10y ago
DickingAround 10y ago
Anyone have any other links of interesting news in this area? Massive thing happens in a massive country and even NPR is not talking about it. Interested to get some news/conclusions-so-far.
- navait 10y ago
  http://www.npr.org/sections/thetwo-way/2016/11/08/501199606/in-surprise-move-india-voids-500-and-1-000-rupee-bills-to-fight-corruption http://www.npr.org/sections/thetwo-way/2016/11/08/501199606/...
  - DickingAround 10y ago
    Yea, I know it was mentioned and I get the stated reason of why. But it's kind of an on-going event and presumably it's evolving as we go (hence this headline). I'm looking for more news.
- ing33k 10y ago
  http://qz.com/868980/vijay-shekar-sharmas-paytm-is-paying-a-price-for-its-sudden-stardom/ http://qz.com/868980/vijay-shekar-sharmas-paytm-is-paying-a-...
- denzil_correa 10y ago
  If you really feel like reading analysis on the move, check these two blogs https://ajayshahblog.blogspot.in/2016/11/trumping-black-money.html https://ajayshahblog.blogspot.in/2016/11/trumping-black-mone... https://ajayshahblog.blogspot.in/2016/12/the-demonetisation-decision-event.html https://ajayshahblog.blogspot.in/2016/12/the-demonetisation-...
Abishek_Muthian 10y ago
Snapdeal is just using the opportunity to get more customers into it's ecosystem, it says that it would take 1 rupee (0.015 USD) commission to deliver 2000 rupees (29.495 USD) and that too from the cash received from COD (cash on delivery). People paying online for products on e-commerce sites is all time high in India as they don't have cash to spare, so I don't really see a way it's going to be successful. As for Paytm, I really doubt their commitment to the security of their products. This was my experience on vulnerability disclosure on their product - https://medium.com/timebender-technologies/paytm-says-to-me-that-its-pos-feature-didn-t-have-a-security-risk-b6b23e5af8c5#.o4teeselz https://medium.com/timebender-technologies/paytm-says-to-me-...
- khrm 10y ago
  I am quite surprised to see their response. First thing, this whole wallet business is fishy and full of security vulnerability. Who is certifying/auditing these wallets companies like in case of internet banking and card transactions?
  - Abishek_Muthian 10y ago
    It should be the same card agencies themselves, they require the application which takes in card details to adhere to PCI DSS guidelines. But it never was designed to have the user enter card details on merchant's phone.
- deleted 10y ago
  [deleted]
djsumdog 10y ago
I still have a 500 rupee somewhere; most likely packed in a box in my parents' basement. Did no one consider the consequences of this move? Surely there were people in government that testified to the fact that over 80% of the currency in circulation were these larger bills? Either this was intentional to move to the country to electronic payments or some elected people didn't listen to anybody, did no analysis and were so clueless they didn't realize this would happen?! If their elected officials really cared about the people as much as they cared about stopping corruption, they should have figured out some type of gradual roll-out policy. Or they could have simply allowed 500/1000 notes but refused to print any more and ordered banks to send all of those notes to their mint. They could then slowly replace the notes over a year and eventually, declare 500/1000 not legal tender after a year, rather than trying to do this all at once.
- vidarh 10y ago
  The point of doing it all at once was to make it harder for those with untaxed cash to have time to find a workarounds. A longer window would defeat the stated goal entirely. > Did no one consider the consequences of this move? Surely there were people in government that testified to the fact that over 80% of the currency in circulation were these larger bills? The supposed large hoards of untaxed cash in these denominations would be the very argument for this move. It's quite possible they've messed up the implementation or got the distribution of these notes wrong, but the stated argument for doing this would be entirely moot if they didnt make up a large portion of the currency in circulation.
  - denzil_correa 10y ago
    > The point of doing it all at once was to make it harder for those with untaxed cash to have time to find a workarounds. A longer window would defeat the stated goal entirely. Lesser than 10% (most aggressive estimate) of the unaccounted income lies in cash. As such, the entire exercise has higher costs than benefits. The idea AND the implement both have no sound reason.
    - whitenoice 10y ago
wav-part 10y ago
A very detailed survey regarding the demonetisation though slightly judgemental. https://decipherdemon.blogspot.in/2016/12/a-monumental-disater-in-offing.html https://decipherdemon.blogspot.in/2016/12/a-monumental-disat...
zaatar 10y ago
Do cashback charge cards exist in India and are they popular? The fees are 1 rupee for every 2000 rupees (i.e. 0.05%), so with a 1% cashback card, each time I were to charge 2000 rupees, I would get back 20 rupees, but pay out 1 rupee in fees to Snapdeal, making a profit of 19 rupees. Repeat 1000x per day, I'm now earning 19000 rupees a day, sitting at home. I guess Snapdeal won't deliver 1000x per day to the same address, and perhaps 1% cashback cards don't exist to begin with ...?

What about smartphone powered payments?

detaro 10y ago
What about them?
happy-go-lucky 10y ago
Paytm? https://paytm.com/ https://paytm.com/
Navarr 10y ago
http://www.npr.org/sections/goatsandsoda/2016/12/21/506330351/india-wants-to-go-cashless-but-its-easier-said-than-done http://www.npr.org/sections/goatsandsoda/2016/12/21/50633035...
dogma1138 10y ago
Local smartphone based payments usually require a local bank account or a debit card; they often do not work with credit at all since they can't hussle commissions nor want to onboard the risk of dealing chargebacks or fund clearance. Local smartphone based payments also require infrastructure which is not always available in india, power and connectivity can be very spotty even worse than some places in Africa. Also with most of these micro payment services they don't really use new tech, a lot of the time it's still based on SMS and is rather insecure and prawn to fraud. You aren't going to be issuing smartphones with NFC and fingerprint readers and the terminals needed to accept such payments in impoverished regions. Anything like Google/Apple pay and you need a bank account which many of those peoples don't have or don't want to have/use, and the Government is unlikely to like a secondary economy like in some African countries which is based on cash bought prepaid call minutes which are then used as currency.
- norswap 10y ago
  I'm confused. Isn't getting cash a problem only if you have a bank account?
  - dogma1138 10y ago
    The problem is that the cash was traded effectively outside of the economic system. In most countries Cash passes through banks or clearinghouses after a transaction is completed. Your employer pays you with a cheque or a bank transfer; you take out cash from the ATM; you buy groceries with that Cash; The store deposits the Cash at a bank or a clearinghouse and receives a cheque or has it's account debited. In this chain the majority of transactions; even cash transactions are "on paper", the problem with India is that people effectively trade with Cash without involving the banks; you get paid in cash (w/ no taxes paid); you buy something from the local grocer w/ cash w/o any recepiet; the local grocer pays their suppliers with cash again often w/o any receipts; pays their employees with cash and so on and on. This means that the majority of the transactions are in effect conducted in grey or black markets.

subbu 10y ago

Snapdeal is not going to win the e-commerce market by delivering cash. They are just deviating even farther from their goal: delivering goods. While Amazon continues to make micro optimizations to improve their service both Flipkart/Snapdeal have taken their foot off the peddle.

amingilani 10y ago
> Flipkart/Snapdeal have taken their foot off the peddle. Got a citation for that? > They are just deviating even farther from their goal: delivering goods. I thought the goal of any business was to make money. IMHO, since cash is such a sought after good in India at the moment, this is a clever way to monetize the cash they get from their Cash on Delivery service. It saves them the logistics of depositing large amounts of cash, while making more money.
shripadk 10y ago
I have to agree with you on this. Amazon India has a wide range of product selection compared to both Flipkart/Snapdeal. I can also import US products from Amazon.com (or Amazon US) and also their equivalent (but slightly smaller) "Global Store" in Amazon India. Flipkart had a golden opportunity to practically take over the e-commerce market in India. But they (like most other Indian companies) aren't/not willing to expand enough.
- JumpCrisscross 10y ago
  > * But they (like most other Indian companies) aren't/not willing to expand enough* Could you expand on this?
  - shripadk 10y ago
    Sure. Flipkart and Snapdeal are not thinking (or have plans that they have declared publicly) of becoming Multi-Nationals to compete with the likes of Amazon and Ebay. Compare that with Alibaba which already has a US arm. I can, as an Indian, browse Amazon US shops and order from them (I of course have to pay shipping + duty on top of the original order). This isn't possible with Flipkart/Snapdeal. Even their local shops have lesser inventory and lesser options in comparison to Amazon India. Since India is a growing economy (and soon to be a less-cash economy), we will very soon get accustomed to purchasing goods and services online (like we did with mobile adoption). Once we do, there is no stopping us from purchasing goods and services from countries outside India as well (which was until recently just next to impossible for the lay man). Unless Flipkart/Snapdeal can cater to that market as well it's losing a big chunk of it's customers. India is definitely poised to become a booming e-commerce market in the future but it has no where near peaked for these companies to be content with. The consumer market is still heavily dominated by the US and European countries. If they do not expand they are doomed. And this is not restricted to e-commerce players alone. I notice this even with payment gateways / payment processors. We have quite a lot of payment processors that have a strong local presence. Some are even as good as Stripe (see Razorpay) when it comes to API and ease of implementation. But then again, they have no ambitions to expand to other countries. So India essentially has no access to an International payment gateway (Paypal doesn't count as it's only used for remittances. There is no equivalent of Paypal IPN/Paypal Express Checkout/Paypal Marketplace). To disrupt these companies, all it takes is for Stripe to open shop in India. Nobody would then have any incentive to use these payment gateways and they'll start seeing their market share diminish.

nautical 10y ago

Ola was also doing something on the same line .

deleted 10y ago
[deleted]

impy 10y ago

As a foreigner visiting India with the demonetisation is also not the most pleasant experience, I had landed on the day that happened. A lot of places luckily accepted credit cards, though in a few cases the authorisation failed (which can also occur at the ATM's, so be careful when queuing) and they don't always have the best infrastructure either (http://imgur.com/a/iJDfw http://imgur.com/a/iJDfw). PayTM isn't an alternative as a foreigner, since you can only charge your account with Indian issued debit or credit cards.

wyager 10y ago
The whole "demonetization" argument seemed blatantly propagandistic to me. The stated goal was to repatriate "black money" (theoretically large untaxed cash reserves held by rich Indians). Let's assume that "black money" is a real problem and not an overstated political bogeyman. Let's ignore the fact that the last thing anyone with serious money is going to store wealth in is cash (especially not Rupees). So you get rid of your largest denominations and what do these theoretical rich people do? They sell their cash at a slight loss for lower denominations. Poor (but still identified and banked) people can make a quick buck by trading all their cash for slightly more cash at the soon-to-be-useless denominations and trading them at a bank (under the allowed daily trade limits). On the other hand, anyone disconnected enough not to have an ID or a bank account but wealthy enough to have a few high-denomination bills gets screwed because changing money at the bank requires you to have an ID or an account. They can also sell their cash on the black market, but they get a worse deal because they're trying to hawk a couple bills, not the large bulk transfers that wealthy people are doing. And, of course, this move decreases the fungibility of Rupees and increases our expectation that the Indian government will do something similarly inconvenient in the future. If the Rupee ever hopes to be a strong currency, this probably didn't help. I suspect a secondary goal of this move was to initiate a migration away from cash. Once you get rid of cash and make all legal money banked, you can do all sorts of fun stuff like impose negative interest rates. The ECB, Denmark, Sweden, Switzerland, and Japan have already experimented with negative interest rates; I expect to see other nations make moves towards it as well. It's an effective way of doing things like propping up property values, as long as you can force people into it.
- 10y ago

DickingAround 10y ago

Anyone have any other links of interesting news in this area? Massive thing happens in a massive country and even NPR is not talking about it. Interested to get some news/conclusions-so-far.

navait 10y ago
http://www.npr.org/sections/thetwo-way/2016/11/08/501199606/in-surprise-move-india-voids-500-and-1-000-rupee-bills-to-fight-corruption http://www.npr.org/sections/thetwo-way/2016/11/08/501199606/...
- DickingAround 10y ago
  Yea, I know it was mentioned and I get the stated reason of why. But it's kind of an on-going event and presumably it's evolving as we go (hence this headline). I'm looking for more news.
ing33k 10y ago
http://qz.com/868980/vijay-shekar-sharmas-paytm-is-paying-a-price-for-its-sudden-stardom/ http://qz.com/868980/vijay-shekar-sharmas-paytm-is-paying-a-...
denzil_correa 10y ago
If you really feel like reading analysis on the move, check these two blogs https://ajayshahblog.blogspot.in/2016/11/trumping-black-money.html https://ajayshahblog.blogspot.in/2016/11/trumping-black-mone... https://ajayshahblog.blogspot.in/2016/12/the-demonetisation-decision-event.html https://ajayshahblog.blogspot.in/2016/12/the-demonetisation-...

Abishek_Muthian 10y ago

Snapdeal is just using the opportunity to get more customers into it's ecosystem, it says that it would take 1 rupee (0.015 USD) commission to deliver 2000 rupees (29.495 USD) and that too from the cash received from COD (cash on delivery). People paying online for products on e-commerce sites is all time high in India as they don't have cash to spare, so I don't really see a way it's going to be successful. As for Paytm, I really doubt their commitment to the security of their products. This was my experience on vulnerability disclosure on their product - https://medium.com/timebender-technologies/paytm-says-to-me-that-its-pos-feature-didn-t-have-a-security-risk-b6b23e5af8c5#.o4teeselz https://medium.com/timebender-technologies/paytm-says-to-me-...

khrm 10y ago
I am quite surprised to see their response. First thing, this whole wallet business is fishy and full of security vulnerability. Who is certifying/auditing these wallets companies like in case of internet banking and card transactions?
- Abishek_Muthian 10y ago
  It should be the same card agencies themselves, they require the application which takes in card details to adhere to PCI DSS guidelines. But it never was designed to have the user enter card details on merchant's phone.
deleted 10y ago
[deleted]

djsumdog 10y ago

I still have a 500 rupee somewhere; most likely packed in a box in my parents' basement. Did no one consider the consequences of this move? Surely there were people in government that testified to the fact that over 80% of the currency in circulation were these larger bills? Either this was intentional to move to the country to electronic payments or some elected people didn't listen to anybody, did no analysis and were so clueless they didn't realize this would happen?! If their elected officials really cared about the people as much as they cared about stopping corruption, they should have figured out some type of gradual roll-out policy. Or they could have simply allowed 500/1000 notes but refused to print any more and ordered banks to send all of those notes to their mint. They could then slowly replace the notes over a year and eventually, declare 500/1000 not legal tender after a year, rather than trying to do this all at once.

vidarh 10y ago
The point of doing it all at once was to make it harder for those with untaxed cash to have time to find a workarounds. A longer window would defeat the stated goal entirely. > Did no one consider the consequences of this move? Surely there were people in government that testified to the fact that over 80% of the currency in circulation were these larger bills? The supposed large hoards of untaxed cash in these denominations would be the very argument for this move. It's quite possible they've messed up the implementation or got the distribution of these notes wrong, but the stated argument for doing this would be entirely moot if they didnt make up a large portion of the currency in circulation.
- denzil_correa 10y ago
  > The point of doing it all at once was to make it harder for those with untaxed cash to have time to find a workarounds. A longer window would defeat the stated goal entirely. Lesser than 10% (most aggressive estimate) of the unaccounted income lies in cash. As such, the entire exercise has higher costs than benefits. The idea AND the implement both have no sound reason.
  - whitenoice 10y ago

wav-part 10y ago

A very detailed survey regarding the demonetisation though slightly judgemental. https://decipherdemon.blogspot.in/2016/12/a-monumental-disater-in-offing.html https://decipherdemon.blogspot.in/2016/12/a-monumental-disat...

zaatar 10y ago

Do cashback charge cards exist in India and are they popular? The fees are 1 rupee for every 2000 rupees (i.e. 0.05%), so with a 1% cashback card, each time I were to charge 2000 rupees, I would get back 20 rupees, but pay out 1 rupee in fees to Snapdeal, making a profit of 19 rupees. Repeat 1000x per day, I'm now earning 19000 rupees a day, sitting at home. I guess Snapdeal won't deliver 1000x per day to the same address, and perhaps 1% cashback cards don't exist to begin with ...?