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For those who are interested in these kind of things, you should check out UPI API built by the government of India. With a singular goal - to kill Visa and Mas

For those who are interested in these kind of things, you should check out UPI API built by the government of India. With a singular goal - to kill Visa and MasterCard and make digital payments free in India. The ultimate goal is to tax on consumption - tax payer base in the world's fastest growing economy is abysmally small. So the economists kind of gave up there and leapfrogged into building a digital economy : make all transactions free and charge GST on consumption. The API is brilliant - recurring charges, refunds, text message payments, etc - basically all the venture funded startups in the US are all free in India.

vit05 9y ago
That looks really interesting. But, the government will hold a lot of information about their citizen, how they will use that? I do not know if something like this could be replicated in every country.
- sanxiyn 9y ago
  The government already holds a lot of information about their citizen. I think this worry is particularly American and not shared by most people. You ask, how they will use that? They don't much use what they already have, so the best guess is that there will be no use. Which is pity, since it can be used for a lot of good. But I guess you would say it is lucky, since it can be used for a lot of bad.
  - mkagenius 9y ago
    > But I guess you would say it is lucky, since it can be used for a lot of bad. "whatever can be used for bad will be used for bad" - murphy's law
- cperciva 9y ago
  the government will hold a lot of information about their citizen, how they will use that? Exactly the way they've already announced that they'll use it: To collect tax.
- flexie 9y ago
  Isn't that better than a couple of private companies, Visa and Madtercard, holding the information (and taxing you meanwhile)?
  - TomMarius 9y ago
    Definitely not. The corporations can't put me in prison or kill me, can't force me to use their services, can't use the data together with other data sources available to governments, don't have incentive to limit my spending and can't flat out take my money, and so on.
    - goalieca 9y ago
      Governments can ask companies to comply to get information.
      - TomMarius 9y ago
        But the companies can then come forward to the public and/or not provide requested data, like it already happened many times.
_jgdh 9y ago
To clarify, this was not built by the Government of India. This is a common misconception because the entity responsible - the National Payments Corporation of India, sounds like an arm of the government. However, it's actually a private corporation whose shareholders are the main banks. [1] Some of those banks happen to be state owned, however. Also, the government has not and will never give up on Income Tax. Although only an estimated 1.5% of the population pays Income Tax [2], that's still the lion's share of govt revenue. By encouraging digital payments, the govt thinks it will be able to track money better and make people less likely to dodge any tax, whether consumption or income tax. Next, transactions on UPI are free for the time being, as mandated by the govt. But if it becomes successful, the plan is to introduce small fees ($0.01-0.06). It's likely that the customer will pay that fee, rather than the merchant, which is the opposite of what we're used to with card networks. It's possible that this will hurt UPIs popularity for small transactions. But the banks that funded the development and upkeep of this API need to see a return on investment, so they're unlikely to keep it free in perpetuity. One compromise is that the fee will only apply to P2P transactions, rather than point-of-sale transactions [3]. Why did the banks fund this then? Don't banks everywhere jealously guard their APIs and minimise interoperability? It's different in India for a couple of reasons. Firstly, India is heavily regulated. The govt issues many declarations, especially in the banking industry, that are meekly listened to. The govt encouraged the creation of a common API, and it was built. Secondly, the banks themselves want to do it. In India, payment apps are very popular because of the great UX. Most restaurants and many small vendors accept mobile payments through "wallet" apps like PayTM (partly owned by Alibaba). These apps increasingly account for most digital transactions. They're nimble because it's easy to sign up with them - unlike banks they don't need to perform KYC until the user has $200 in his wallet. The banks can see the writing on the wall - either they provide a compelling payment experience or they will be replaced. The next generation of customers might end up opening bank accounts with PayTM instead. Here's the really interesting nugget in all of this though. We have a payment API exposed by all major banks. We're not stuck with only the substandard apps developed by banks, anyone can build one, pending approval by the banking authority (RBI). It's reported in the press that Facebook and Google have both applied for this approval [4], so we could see it integrated with WhatsApp, Messenger and Android in the near (3-9 months) future. If you can pay through WhatsApp, why take out your credit card? [1] - http://www.thehindubusinessline.com/money-and-banking/npci-broadbases-shareholding-base-to-56-banks/article9099863.ece http://www.thehindubusinessline.com/money-and-banking/npci-b... [2] - http://economictimes.indiatimes.com/news/economy/policy/why-income-tax-payers-in-india-are-a-small-and-shrinking-breed/articleshow/56929550.cms http://economictimes.indiatimes.com/news/economy/policy/why-... [3] - http://gadgets.ndtv.com/internet/news/upi-payments-tax-chargeable-india-july-10-1708490 http://gadgets.ndtv.com/internet/news/upi-payments-tax-charg... [4] - http://timesofindia.indiatimes.com/business/india-business/whatsapp-gets-nod-for-upi-payments/articleshow/59537161.cms http://timesofindia.indiatimes.com/business/india-business/w...
captn3m0 9y ago
While you're right in pointing out that UPI was built against VISA and MasterCard and it is an innovative solution, I would not brand it as a brilliant API. Recurring charges are currently not supported, we've seen frauds to the tune of 40cr happen already, "text message payments" is not part of the specification. It is a bank transfer method, that happens to run on mobile phones. It uses AES-256 with a static IV, and then calls it a hmac (common library spec). Also, this is not the Government, but NPCI (which is a private entity held by all major banks in India). Disclaimer: I work for a payments company in India.

vit05 9y ago

That looks really interesting. But, the government will hold a lot of information about their citizen, how they will use that? I do not know if something like this could be replicated in every country.

sanxiyn 9y ago
The government already holds a lot of information about their citizen. I think this worry is particularly American and not shared by most people. You ask, how they will use that? They don't much use what they already have, so the best guess is that there will be no use. Which is pity, since it can be used for a lot of good. But I guess you would say it is lucky, since it can be used for a lot of bad.
- mkagenius 9y ago
  > But I guess you would say it is lucky, since it can be used for a lot of bad. "whatever can be used for bad will be used for bad" - murphy's law
cperciva 9y ago
the government will hold a lot of information about their citizen, how they will use that? Exactly the way they've already announced that they'll use it: To collect tax.
flexie 9y ago
Isn't that better than a couple of private companies, Visa and Madtercard, holding the information (and taxing you meanwhile)?
- TomMarius 9y ago
  Definitely not. The corporations can't put me in prison or kill me, can't force me to use their services, can't use the data together with other data sources available to governments, don't have incentive to limit my spending and can't flat out take my money, and so on.
  - goalieca 9y ago
    Governments can ask companies to comply to get information.
    - TomMarius 9y ago
      But the companies can then come forward to the public and/or not provide requested data, like it already happened many times.

_jgdh 9y ago

To clarify, this was not built by the Government of India. This is a common misconception because the entity responsible - the National Payments Corporation of India, sounds like an arm of the government. However, it's actually a private corporation whose shareholders are the main banks. [1] Some of those banks happen to be state owned, however. Also, the government has not and will never give up on Income Tax. Although only an estimated 1.5% of the population pays Income Tax [2], that's still the lion's share of govt revenue. By encouraging digital payments, the govt thinks it will be able to track money better and make people less likely to dodge any tax, whether consumption or income tax. Next, transactions on UPI are free for the time being, as mandated by the govt. But if it becomes successful, the plan is to introduce small fees ($0.01-0.06). It's likely that the customer will pay that fee, rather than the merchant, which is the opposite of what we're used to with card networks. It's possible that this will hurt UPIs popularity for small transactions. But the banks that funded the development and upkeep of this API need to see a return on investment, so they're unlikely to keep it free in perpetuity. One compromise is that the fee will only apply to P2P transactions, rather than point-of-sale transactions [3]. Why did the banks fund this then? Don't banks everywhere jealously guard their APIs and minimise interoperability? It's different in India for a couple of reasons. Firstly, India is heavily regulated. The govt issues many declarations, especially in the banking industry, that are meekly listened to. The govt encouraged the creation of a common API, and it was built. Secondly, the banks themselves want to do it. In India, payment apps are very popular because of the great UX. Most restaurants and many small vendors accept mobile payments through "wallet" apps like PayTM (partly owned by Alibaba). These apps increasingly account for most digital transactions. They're nimble because it's easy to sign up with them - unlike banks they don't need to perform KYC until the user has $200 in his wallet. The banks can see the writing on the wall - either they provide a compelling payment experience or they will be replaced. The next generation of customers might end up opening bank accounts with PayTM instead. Here's the really interesting nugget in all of this though. We have a payment API exposed by all major banks. We're not stuck with only the substandard apps developed by banks, anyone can build one, pending approval by the banking authority (RBI). It's reported in the press that Facebook and Google have both applied for this approval [4], so we could see it integrated with WhatsApp, Messenger and Android in the near (3-9 months) future. If you can pay through WhatsApp, why take out your credit card? [1] - http://www.thehindubusinessline.com/money-and-banking/npci-broadbases-shareholding-base-to-56-banks/article9099863.ece http://www.thehindubusinessline.com/money-and-banking/npci-b... [2] - http://economictimes.indiatimes.com/news/economy/policy/why-income-tax-payers-in-india-are-a-small-and-shrinking-breed/articleshow/56929550.cms http://economictimes.indiatimes.com/news/economy/policy/why-... [3] - http://gadgets.ndtv.com/internet/news/upi-payments-tax-chargeable-india-july-10-1708490 http://gadgets.ndtv.com/internet/news/upi-payments-tax-charg... [4] - http://timesofindia.indiatimes.com/business/india-business/whatsapp-gets-nod-for-upi-payments/articleshow/59537161.cms http://timesofindia.indiatimes.com/business/india-business/w...

captn3m0 9y ago

While you're right in pointing out that UPI was built against VISA and MasterCard and it is an innovative solution, I would not brand it as a brilliant API. Recurring charges are currently not supported, we've seen frauds to the tune of 40cr happen already, "text message payments" is not part of the specification. It is a bank transfer method, that happens to run on mobile phones. It uses AES-256 with a static IV, and then calls it a hmac (common library spec). Also, this is not the Government, but NPCI (which is a private entity held by all major banks in India). Disclaimer: I work for a payments company in India.