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Payments ultimately keep the economy running, and it's in the government's best interests to make sure there is as little friction as possible here. But I'm not

Payments ultimately keep the economy running, and it's in the government's best interests to make sure there is as little friction as possible here. But I'm not sure it should be free. Because there is always a cost to things. If UPI is "free" then it is being funded by the taxpayers. The problem with that is, it's not very equitable distribution of cost. People who use payments less, are funding it on behalf of people who use them a lot, who ironically are able to contribute more tax. A usage based fee is essentially a service tax which many would argue is a fairer form of taxation than fixed tax.

unmole 4y ago
UPI is supposed to replace cash. Cash is free.
- 6510 4y ago
  This is so obvious I keep want to say it in topics like this: What have we gained with all this automation if clowns decide % fees are reasonable. Before you know it large players capture the market and we are stuck with ever growing fees. What percentage of startups are trying to improve something vs hoping to capture a market? How do you even tell the difference at this point? Things are so silly that numbers cost money now. Many imagined the dystopian future where people are numbers but few could picture it this dark... You would think you got your own number and are stuck with it. In stead you merely get to rent a number and if you cant pay the rent the system is to troll you hard for god knows how long. How is this superior to cash?
deepakshenoy 4y ago
Banking payments are never useful to charge progressively. Always, one part of the banking system subsidises the other, so some players will pay for others, some borrowers will pay higher for others to get lower rates etc. Banking is not a bunch of silos, it's fungible, interconnected, dependant activities. Usage based fees are not good; you want people to transact more so you can earn more float income on average rather than nickle and dime out fees from a few and this reduce growth. The float income pays for everything and much much more, so no point doing usage based fees
- potamic 4y ago
  Ultimately somebody has to fund NPCI for the interchange infrastructure. If the banks have to absorb the cost, then smaller players will be hurt and find it difficult to compete. If RBI absorbs the cost, then we are back to the taxpayer situation. There is no such thing as a free service really if you think about it.

unmole 4y ago

UPI is supposed to replace cash. Cash is free.

6510 4y ago
This is so obvious I keep want to say it in topics like this: What have we gained with all this automation if clowns decide % fees are reasonable. Before you know it large players capture the market and we are stuck with ever growing fees. What percentage of startups are trying to improve something vs hoping to capture a market? How do you even tell the difference at this point? Things are so silly that numbers cost money now. Many imagined the dystopian future where people are numbers but few could picture it this dark... You would think you got your own number and are stuck with it. In stead you merely get to rent a number and if you cant pay the rent the system is to troll you hard for god knows how long. How is this superior to cash?

deepakshenoy 4y ago

Banking payments are never useful to charge progressively. Always, one part of the banking system subsidises the other, so some players will pay for others, some borrowers will pay higher for others to get lower rates etc. Banking is not a bunch of silos, it's fungible, interconnected, dependant activities. Usage based fees are not good; you want people to transact more so you can earn more float income on average rather than nickle and dime out fees from a few and this reduce growth. The float income pays for everything and much much more, so no point doing usage based fees

potamic 4y ago
Ultimately somebody has to fund NPCI for the interchange infrastructure. If the banks have to absorb the cost, then smaller players will be hurt and find it difficult to compete. If RBI absorbs the cost, then we are back to the taxpayer situation. There is no such thing as a free service really if you think about it.