15 ms·

A digital payments revolution in India

164 points by saikatsg 3y ago

saikatsg 3y ago
https://archive.is/I3eAI https://archive.is/I3eAI
pokepim 3y ago
[dead]
toomuchtodo 3y ago
India: https://en.wikipedia.org/wiki/Unified_Payments_Interface https://en.wikipedia.org/wiki/Unified_Payments_Interface Brazil: https://en.wikipedia.org/wiki/Pix_(payment_system) https://en.wikipedia.org/wiki/Pix_(payment_system) US: https://en.wikipedia.org/wiki/FedNow https://en.wikipedia.org/wiki/FedNow
- cubefox 3y ago
  Germany: https://en.m.wikipedia.org/wiki/Giropay https://en.m.wikipedia.org/wiki/Giropay By the way, according the the Wikipedia article, the launch of the US American FedNow service is imminent. I wonder whether it has any chance against the more expensive but widely adopted credit card payments.
  - toomuchtodo 3y ago
    Walmart is already preparing to adopt FedNow payments, and submitted comments during the public comment period. https://www.pymnts.com/news/retail/2023/walmart-hints-at-early-fednow-adoption-while-amazon-is-mum-so-far/ https://www.pymnts.com/news/retail/2023/walmart-hints-at-ear... https://www.federalreserve.gov/SECRS/2019/December/20191227/OP-1670/OP-1670_110719_137048_409015547480_1.pdf https://www.federalreserve.gov/SECRS/2019/December/20191227/...
    - cubefox 3y ago
      > Walmart has observed a severe misalignment of incentives that has plagued the payments system in the United States for decades. Certain incumbents and large participants enjoy massive profits by stifling innovation in payments, ensuring that account access is limited to a small number of networks, and perpetuating barriers to entry for alternative solutions. Controlling this access allows the dominant players to extract rents from other payments system participants, ultimately resulting in higher costs for all consumers, particularly consumers who are unbanked or underbanked. They say it how it is.
      - marcosdumay 3y ago
        They are ignoring the systemic manipulation of the entire market against people deemed "undesirable" or that are just poor. But well, they probably never noticed it.
        deleted 3y ago
        [deleted]
        hakfoo 3y ago
        In an enemy-of-my-enemy perspective, Walmart comes out as the "good guy" here because their market position aligns best with the unbanked/underbanked audience. Neiman-Marcus is less likely to complain about their audience not having access to modern payment rails; they might kvetch about the cost of accepting a Platinum Amex, but that's a different debate entirely.
  - __jonas 3y ago
    but giropay is owned by a private company, not the state or central bank. also it’s an online payment service, not sure you can use it for direct transfers or in person payments like those others
- abdullahkhalids 3y ago
  Also, Pakistan launched its own last year. Unfortunately, no wiki entry. https://www.sbp.org.pk/dfs/Raast.html https://www.sbp.org.pk/dfs/Raast.html
- rnjailamba 3y ago
  Singapore: FAST - https://www.abs.org.sg/consumer-banking/fast https://www.abs.org.sg/consumer-banking/fast Thailand: PromptPay - https://www.bangkokbank.com/en/Personal/Digital-Banking/PromptPay https://www.bangkokbank.com/en/Personal/Digital-Banking/Prom... Australia: NPP - https://www.rba.gov.au/payments-and-infrastructure/new-payments-platform/ https://www.rba.gov.au/payments-and-infrastructure/new-payme... Hong Kong: FPS - https://www.hkma.gov.hk/eng/smart-consumers/faster-payment-system/ https://www.hkma.gov.hk/eng/smart-consumers/faster-payment-s... Philippines: InstaPay - https://www.instapayph.com/ https://www.instapayph.com/ Mexico: CoDI - https://www.codi.org.mx/ https://www.codi.org.mx/ Indonesia: BI-FAST - https://www.bi.go.id/en/publikasi/ruang-media/news-release/Pages/sp_2333421.aspx https://www.bi.go.id/en/publikasi/ruang-media/news-release/P...
  - martyvis 3y ago
    NPP is fantastic. (Often referred to as PayID, Fast Payment or Osko, depending on your bank here in Australia). Last Friday I was able to buy an item from a friend while we both standing in his driveway - he confirmed the payment on his account. He just provided his BSB (6 digit bank number) and account and I did the transfer. We both use non major banks. I have used it to settle split bills with colleagues after lunches. Usually you just link your mobile number or email address. All without bank fees or going anywhere near Visa, MasterCard or Paypal and confirmed in under a minute.
    - valzam 3y ago
      You can even a phone number instead of use BSB and acc no. Super convenient
  - toomuchtodo 3y ago
    Thanks for sharing these links! If someone wants to start a Wikipedia page enumerating global instant payment systems, I'm happy to chip some fiat in. Email in profile.
- codethief 3y ago
  Europe: SEPA Instant Credit Transfer https://www.europeanpaymentscouncil.eu/what-we-do/sepa-instant-credit-transfer https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta... https://en.wikipedia.org/wiki/Single_Euro_Payments_Area#Schemes https://en.wikipedia.org/wiki/Single_Euro_Payments_Area#Sche... So far it hasn't seen widespread adoption, though.
- thasaleni 3y ago
  South Africa: Payshap https://www.payshap.co.za/ https://www.payshap.co.za/
mkrishnan 3y ago
[flagged]
- crossroadsguy 3y ago
  Unless it’s an interpersonal transaction or a business which I frequent or close to where I stay I do not use UPI. The Transaction can remain in “In Processing” for upto 48 hours and then it can go either way. I mean someone had to be especially challenged to not consider this in a modern payment system.
- supriyo-biswas 3y ago
  It's regrettable and astounding at the same time that a factual comment is getting downvoted. UPI should absolutely introduce a facility to chargeback a transaction, which is why I always prefer to use my credit card, if possible.
  - samarthr1 3y ago
    Not sure if you are unfamiliar with the credit cards issued in India, but my bank's fraud protection is limited to "did someone steal your card and make a payment"
    - ta7789 3y ago
      Credit cards work differently in the US compared to the rest of the world. You can just "charge back" the merchant for pretty much any reason.
      - EVa5I7bHFq9mnYK 3y ago
        No, you can't. I tried twice. Banks side with the merchants because merchants pay them, not you.
  - cubefox 3y ago
    A credit card costs more in the long run, otherwise credit card companies wouldn't be profitable.
nish1500 3y ago
When you pay a merchant $100 with your card they get about $97. When this $100 has exchanged hands 50 times only $15 remains. The bank owns the other $85. Cash is a hassle but it cuts out the middlemen. We need a unified payment system in western countries, but it's almost impossible given how much of a chokehold big banks have over our economy. Capitalism at its finest.
- louwrentius 3y ago
  I agree. From what I understood, the Dutch iDeal system (which I love) might become a European standard. It doesn’t cover large parts of the world but I think the fees are not as “insane” as PayPal or systems like this.
  - aleph_minus_one 3y ago
    > From what I understood, the Dutch iDeal system (which I love) might become a European standard. What can you tell me about iDeal's privacy aspects? Does it allow anonymous transactions (here it mght make sense to distinguish between - non-anonymous entity sends money to anonymous entity - anonymous entity sends money to non-anonymous entity - anonymous entity sends money to anonymous entity; "anonymous" is here to be understood as "anonymous to iDeal", i.e. iDeal has no practical chance of de-anonymizing this identity)?
    - louwrentius 3y ago
      As far as I know only the Merchant and your account is known to iDeal, not what you buy.
- solatic 3y ago
  You make it sound like the other $85 that the bank got sits in a vault somewhere, extracted from the economy and hoarded in a stockpile. Actually the banks have their own costs (e.g. salaries) and much of the money is further invested. In fact, the natural state is to keep so little cash on hand that Dodd-Frank forced the banks to hoard more than they otherwise were inclined to. Yes I've oversimplifying a lot of differences (payments infrastructure vs. investment banking, for one) but the point remains. I do think that day-to-day realtime debit-style payments should be a publicly-operated, minimal-or-zero-fee commodity rather than a massive source of rent, but having access to electronic payments for consumer retail is literally responsible for trillions of dollars more economic activity than you would see if we went back to cash-only.
rvz 3y ago
A 'revolution' to on-board users and then airdrop them free money in order for the Reserve Bank of India to deploy their own CBDC on top of UPI. [0] [1] Just like the catastrophic e-Naira and the widely adopted and dystopian digital Yuan this 'revolution' is all about CBDCs. India is being a bit more clever in moving everyone in India on to their e-rupee CBDC and using the UPI hype and free money airdrops to do that. [0] https://techmonitor.ai/policy/digital-economy/nobodys-using-cbdcs-indias-piloting-one-anyway https://techmonitor.ai/policy/digital-economy/nobodys-using-... [1] https://indianexpress.com/article/explained/what-is-e-rupi-digital-currency-india-pm-modi-7433637/ https://indianexpress.com/article/explained/what-is-e-rupi-d...
- cuteboy19 3y ago
  Although cbdc is a goal, the main purpose of UPI is simplified digital payments. UPI grew because of its technical superiority to existing methods, even regular people could see that difference. It's not because of incentives that it is so popular and most people never recieved them
  - rvz 3y ago
    So that governments can track, freeze and seize your funds at will or add savings limits to your account to get you to spend more and save less. [0] [1] Once the government does something extremely unpopular, I will only see the same thing that happened with the trucker protesters with their bank accounts getting frozen which will happen in other countries for just protesting [2] and next time, CBDCs will play a significant role on who actually controls your money and they will do anything like banning the use of ATMs [3] to get you to use CBDCs. [0] https://www.premiumtimesng.com/business/business-news/571691-just-in-cbn-amends-cash-withdrawal-policy-raises-weekly-limits.html https://www.premiumtimesng.com/business/business-news/571691... [1] https://reclaimthenet.org/digital-euro-spending-saving-limits https://reclaimthenet.org/digital-euro-spending-saving-limit... [2] https://www.newsweek.com/banks-have-begun-freezing-accounts-linked-trucker-protest-1680649 https://www.newsweek.com/banks-have-begun-freezing-accounts-... [3] https://www.pymnts.com/cbdc/2022/nigeria-cuts-atm-cash-withdrawals-and-urges-enaira-use/ https://www.pymnts.com/cbdc/2022/nigeria-cuts-atm-cash-withd...
photochemsyn 3y ago
[flagged]
- FpUser 3y ago
  >"where every transaction you ever partake in is authorised and recorded by a privately run commercial bank" Isn't it the same in The West bar cash transaction? >"If such a bank does not like an enterprise – such as Wikileaks – it can just freeze it out" Same question again. For example in Canada they did just that during tracker's convoy. I am not telling we are at their level (yet) but the direction ever country seems to be moving in looks like for more government / big corps spying and control.
  - SantalBlush 3y ago
    I think there is a rather large class of people who are just fine with oppressive regimes, as long as it doesn't affect them. The pretense is always "reducing crime". This includes a lot of self-proclaimed pro-freedom types, as well. They'll support an oppressive regime so long as their own freedoms aren't restricted, and the problem grows.
- blntechie 3y ago
  How is it different from any digital payment? Many European countries and the US has been doing digital transactions for like 2 decades now. How was it not authoritarian then but suddenly when the Asian people do it, it's a way to track everything people does and not the simplest explanation which is it makes transactions easier?
  - stavros 3y ago
    It's authoritarian here as well, who said the opposite? Digital payments are a privacy nightmare.
  - aleph_minus_one 3y ago
    > Many European countries and the US has been doing digital transactions for like 2 decades now. How was it not authoritarian Many German people are still deeply distrusting of digital money transactions (keep in mind that there were two dictatorial regimes on German soil in the 20th century, of which one only ceased to exist little more than 30 years ago). > How was it not authoritarian then but suddenly when the Asian people do it, it's a way to track everything people does These people typically rather think that Asians should not make the same mistake (ignoring dangerous surveillance aspects).
lucasfcosta 3y ago
As a note, this is slightly incorrect: > The Indian model is inspiring others. Brazil’s Pix, which facilitates bank-to-bank payments with a small fee, was launched in November 2020. It now accounts for some 30% of Brazil’s electronic payments (credit and debit cards take up around 20% each) In fact, Pix is free, which is the main reason why the Brazilian population adopted it so widely and so quickly. Before Pix, you'd always have to pay a significant fee to make bank transfers, and they could end up taking a whole day to go through.
- rozularen 3y ago
  in Spain there's Bizum
- Carioca 3y ago
  Nitpick: Pix is free between people. Companies pay ~1% of the transaction
  - stefan_ 3y ago
    That is crazy high, cash back credit card levels
  - rippercushions 3y ago
    Nope, on average 0.22%. https://www.reuters.com/article/brazil-cenbank-pix-idUSL2N2VP316 https://www.reuters.com/article/brazil-cenbank-pix-idUSL2N2V...
braindead_in 3y ago
Just one mention of India Stack and no mention of iSpirit/Sharad Sharma at all. They were the brains behind it all. I hope they do something with LLMs as well.
fnord77 3y ago
sounds like the exact opposite of crypto
- alephnerd 3y ago
  Yep, and it's actually useful for unbanked people. It's essentially a digitized version of Postal Saving Systems [0] that were traditionally common in Central and Eastern Europe. Tbf, a lot of the thought leadership done to design UPI+IndiaStack was done by people with an actual background in Developmental Economics+Banking at JPAL (MIT+Harvard), FSI (Stanford), and BFI (UChicago). A lot of Policy Advising in India+China+ASEAN is done by alumni of those 3 programs. [0] - https://en.m.wikipedia.org/wiki/Postal_savings_system https://en.m.wikipedia.org/wiki/Postal_savings_system
illegalmemory 3y ago
I simply love UPI! I have seen this firsthand in remote villages and it has completely changed how small merchants accept money. Recently, while I was in Goa and even out in the ocean off the coast, the ease with which I was able to make payments was out of this world.
- HeavyFeather 3y ago
  > in remote villages > the ease with which I was able to make payments I find it hard to believe that handing cash was "hard" in any way.
  - b345 3y ago
    Getting cash is hard where there are no ATMs and you aren't offering any services
colesantiago 3y ago
I'm so happy that payment rails services such as UPI, PIX and the like are getting more attention. This is a breath of fresh air compared to last years vile crypto fad. I'm hoping FedNow in the US completely wipes crypto and the world will follow on from what India and Brazil has done. Bravo!
- WinstonSmith84 3y ago
  Mass surveillance, yay! Fed ... what? Anyway, do not worry, your hopes will be fulfilled very soon in the US with the arrival of the digital dollar. More control and surveillance, how delighting!
  - cubefox 3y ago
    Less control, if anything. Remember how credit card companies blocked WikiLeaks and Pornhub?
    - WinstonSmith84 3y ago
      How could that be less control when it will be in fact a centralized database? Remember how much trouble it was for the Canadian government to freeze the accounts of the Canadian truckers? Now it will just be a request to an "admin"...
      - cubefox 3y ago
        Is it really centralized?
        WinstonSmith84 3y ago
        It will be, that's what CB in CBDC is about. If you wonder what Governments may / will do with CBDC, here is something which shall be enlightening https://cointelegraph.com/news/the-world-could-be-facing-a-dark-future-thanks-to-cbdcs https://cointelegraph.com/news/the-world-could-be-facing-a-d...
new2yc 3y ago
[flagged]
- perryizgr8 3y ago
  > have started to put transxn fees on UPI transactions Huh? I don't think so.
  - new2yc 3y ago
    There you go: [livemint](https://www.livemint.com/news/india/upi-payments-to-now-cost-more-who-will-pay-and-what-are-the-charges-explained-11680162141068.html https://www.livemint.com/news/india/upi-payments-to-now-cost...). You can argue that it is for above 2000 INR, or just for merchants (street vendors?). Implemented on all UPI providers. Also, these corps. also put up random charges -- like any big company, e.g., Platform Fees on recharges at [Paytm](https://www.livemint.com/technology/paytm-starts-levying-platform-fee-for-recharges-check-the-details-here-11654878385753.html https://www.livemint.com/technology/paytm-starts-levying-pla...).
- twoclicksnorth 3y ago
  > The Indian Govt. has already shown their intentions in their parliament. Running Payment infrastructure have a cost for banks. somebody has to pay for it though taxes or fees. > RBI has became a puppet of it (shown by their actions time and time). They tried getting judiciary (SC) but couldn't get it this time. RBI is central bank. Its a statutory institution that is answerable to Elected Govt what are you expecting ? Its the Supreme court regularly oversteps its limits and plays govt. > The big UPI mandates corps. (PhonePe, Paytm, and GPay), in India, have started to put transxn fees on UPI transactions. Only for transactions greater than 2000 and that too very low. This wouldn't affect poor at all. > Just like cryptocurrencies (no regulations whatsoever but flat 30% on all the profits), the govt. will find a way to get the juice out of UPI sooner or later. All thanks to that dumb finance minister. Cryptocurrencies are a grift and Govt is right to ban it. Say what you will of the Govt about stupid religious policies and idiotic and pompous schemes and outright undemocratic policing situation but so far gov has done a good job as far as fiscal health and Currency stability are concerned.
ledgerdev 3y ago
Any possibility for some regional/local/state payment system in the US that's not a 3% tax on every purchase?
- cubefox 3y ago
  Someone else posted this: https://en.m.wikipedia.org/wiki/FedNow https://en.m.wikipedia.org/wiki/FedNow > FedNow is a service developed by the Federal Reserve for depository institutions in the United States. It will enable individuals and businesses to send and receive instant payments.[1][2][3][4] Banks will be able to build products on top of the FedNow platform.[5] > FedNow is scheduled to begin formal certification of participants of the program in April 2023, with a formal launch planned for July 2023.[6][7] It will operate on a 24-hour, 365-days-a-year basis,[8] as opposed to the U.S. government's current system that is closed on weekends and holidays.[9][10] FedNow's transaction costs are expected to be about one-fifth the cost of existing payment solutions, which cost merchants an average of $0.23 per transaction.[5][clarification needed]
nine_zeros 3y ago
UPI is the best! It is like Mastercard, stripe, bank transfers, Venmo and goolf ol cash combined, only that it is available as a free public utility. If they only introduce a way to do chargebacks (or a fair dispute mechanism), the remaining few cash transactions will go away too.
- Proven 3y ago
  [dead]
cvjcvjcvj 3y ago
There are no fee at all using Brazil's pix.
ta7789 3y ago
People seem to have a general distrust about the Indian government and the UPI system. There are certainly a lot of conspiracy theories floating around. The plain idea of UPI is that it is publicly funded digital infrastructure. The US has networks such as Mastercard, Visa, etc. These are privately run digital infrastructure that facilitate digital payments. UPI is publicly funded digital infrastructure. AFAIK it is legal for private digital infrastructure such as Visa, MC, etc to exist. However, due to the tax payer funded nature of UPI the fees are way lower than private digital infrastructure can offer. This has been the main criticism against it by the private players. Let's be clear, governments everywhere build roads using taxes and offers them for "free" to the citizens. That doesn't stop private entities from creating private roads for a fee. However, no private entity tries to build road infrastructure as it is not a profitable business. Thats the same situation with digital payments in India due to UPI's existence. That doesn't mean that private businesses cannot offer their own private payment networks with value added services to compete with UPI. The mindset in the west is very different than the east which leads to a whole lot of unfounded criticism on here.
- padiyar83 3y ago
  Thank you for bringing this clarity. And as an Indian citizen I am glad we took this step towards building an independent payments infrastructure, given how critical a payments clearance system is to the functioning of a modern economy. I don't want other governments to hold us hostage through Visa's and Mastercard's where we are just one sanction away from economic meltdown. Just like what happened recently in Russia. As a country we should be looking at securing other such critical support systems - Power control systems, Telecom hardware etc. That's the only way IMO to be truly independent!
  - ta7789 3y ago
    Absolutely, the US government has a long tradition of weaponizing US Dollar and SWIFT to cut off countries from global trade. This is a fact that has been happening ever since the petrodollar was invented. Governments all over the world, especially India, have realized this is a big vulnerability and a threat to their country's sovereignty. India, Brazil and several countries across the world have invested in their own infrastructure as they rightly should to keep their economic independence. For those who don't know India has been on the receiving end of US sanctions for a variety of reasons. While the reasoning behind the sanctions has been long debated, it is plainly obvious from the Indian vantage point that economic independence is very critical for their survival.
SanjayMehta 3y ago
The comments in this thread lack some context. Prior to UPI, the government ensured that anyone with a mobile phone, even just a feature phone, could open a bank account. This enabled direct transfer of subsidies to eligible citizens. An earlier PM Rajiv Gandhi had admitted that only 15% of benefits actually reached the intended recipients, the rest being consumed in overheads and corruption. UPI ensures that even people in remote locations can make payments without having to walk long distances to withdraw theirbcash from a bank. Villages don't have ATMs. It's more like a debit card than anything else, but you use a phone instead of a card. As for tracking fears, all debit/credit card transactions are logged so UPI is no different. If you want to use cash, you can do so, but you'd be surprised how many vendors prefer UPI as they don't have to worry about change.
ft-kenya-claims 3y ago
The article repeats a claim discussed by https://www.tandfonline.com/doi/pdf/10.1080/03056244.2019.1614552?download=true https://www.tandfonline.com/doi/pdf/10.1080/03056244.2019.16... "that ‘access to the Kenyan mobile money system M-PESA increased per capita consumption levels and lifted 194,000 households, or 2% of Kenyan households, out of poverty’ (Suri and Jack 2016, 1288). It is no exaggeration to say that this article and its specific poverty reduction claim have electrified the international development community." "If Suri and Jack’s claims are broadly verifiable, then here we have one of the most important anti-poverty interventions of recent history. Anyone concerned with addressing global poverty, including the current authors, should be very happy indeed. However, extreme caution is warranted. This is because the recent history of the international development community is, unfortunately, littered with claims of miraculous poverty-reducing policy interventions, a great many of which are then shown at a later date to be quite ineffective" The authors critique the M-PESA claims on six grounds: * Impact of exit not discussed: "while it is relatively easy to provide financial and other stimuli to encourage certain groups to move into petty entrepreneurship, if there is no commensurate increase in local demand at the same time then the zero-sum end result is simply the redistribution of local demand among a larger number of market participants" * Impact of displacement ignored: "There is [...] no attempt to compare the outcomes of those households managing to establish or expand a tiny retail business with the help of M-Pesa, and those households in the same community that have no engagement with M-Pesa but are already in possession of, and therefore survive because of, a tiny retail business." * Rising over-indebtedness in Kenya: "they choose to measure specific household increases in incomes and savings attributable to M-Pesa, but fail to calculate the impact of the wider (but gradual) increases in debt also attributable to M-Pesa. Over-indebtedness has been rising to dangerous levels in almost all parts of the global South where access to microcredit has been facilitated by the international development community" * Accumulation by dispossession: "as of 2018, the ownership of M-Pesa resides with the Kenya-registered company, Safaricom. [... which] is today 40% owned by the UK multinational Vodafone plc [...] [Safaricom] alone accounts for a massive 40% of the total stock market valuation on the Nairobi securities exchange" * Wealthy versus poor networks: "the increase in consumption they observe could simply result from wealth being passed along fin-tech-enabled linkages to others in the same family or social circle or class." * Flawed impact evaluation methodology: "M-Pesa agents, just as with other financial units seeking profit elsewhere in Africa, are well known for proliferating in wealthier urban areas where there are more opportunities to obtain large client numbers and wealthier clients, the combination of which is more likely to generate higher financial returns" The authors conclude: "There is little doubt that fin-tech has the potential to liberate enormous value. The digital finance sector has been expanding at a mind-boggling rate from China to Southeast Asia, from Africa to Latin America. But the core problem as it stands – as illustrated in Kenya and other places around the world – is that the bulk of this value does not go to the poor. Rather, fin-tech is very clearly designed to hoover up value and deposit it into the hands of a narrow global digital-financial elite that are the main forces behind the fin-tech revolution. Of course, this enormous wealth could be redirected towards Kenya’s poor population and reinvested locally, for example through community-owned financial institutions and financial cooperatives, but there would appear to be little time, sympathy, or political support for building such pro-poor institutions when so much wealth can be appropriated by so few so quickly in another way."
kylehotchkiss 3y ago
I wish there were better ways to use UPI as a tourist. Like if wise.com could support QR code payments to it. Right now the system isn’t very accessible to those on short term visits.
- ffpip 3y ago
  https://travel.economictimes.indiatimes.com/news/technology/foreign-tourists-travellers-in-india-can-now-make-payments-using-upi-know-more-details/98179802 https://travel.economictimes.indiatimes.com/news/technology/... (Foreign tourists & travellers in India can now make payments using UPI)
  - kylehotchkiss 3y ago
    Interesting! It took me a lot of googling after reading to figure this out… The international airports have Thomas Cook booths for exchanging cash to rupees. They now allow foreigners to create an account on this app called “fave” which they can reload only at the airport. This is limited only to g20 countries (that’s an odd requirement considering many wealthy countries aren’t in g20). It’s a start but still way too complicated to figure out after 10 hour flight and stressful airport entry. I hope they improve by integrating recharge by PayPal or another internationally useful service.
    - ffpip 3y ago
      > that’s an odd requirement considering many wealthy countries aren’t in g20 It was during the G20 convention, so probably to promote it in some way
devnull3 3y ago
As a big fan of UPI, I have a concern if people became too much dependent on it. What happens when there is a power outage for extended period of time (due to war, natural calamity, grid failure, etc)? Most shops in India do not have backup power provisioned.
- chupchap 3y ago
  In such a scenario only cash works.
- abhayhegde 3y ago
  You're talking about all hell breaks loose kind of situations and anything basic would be a concern then, let alone UPI not working. There's no universal solutions for such situations. That doesn't mean the country shouldn't be too dependent on UPI.
deleted 3y ago
[deleted]
villgax 3y ago
UPI is just a simpler IMPS(which used mobile number) with email address like handle which again is either mobile@bank or email/name@bank just like Venmo. Nothing revolutionary at all. There is no customer care that you can call & have your problems addressed, you still need to go to your bank for any issues or refunds coz for some reason Indians are not exactly entrusted with being able to raise chargebacks
himujjal 3y ago
Weird there are even negative comments about UPI. That too from people who haven't lived in pre-UPI era. My father and my uncle both have had history of losing cash to robbery earlier in the past in broad daylight. Snatch and run. Huge amounts of cash. My wallet has not seen any paper-based cash in over 1-2 years now and I live in a Tier-4 town/city. The habit of not giving the extra 1-2 rupees of extra change has gone. Now, its the exact amount. Plus no one these days have to loan out payments. You can directly pay the amount quick. The scale and the way UPI has become such an integral part of Indian lives is such so much valuable that the minor inconveniences (Privacy & customer care) are ignorable.
- creaper 3y ago
  >The habit of not giving the extra 1-2 rupees of extra change has gone. Yea, but I bet you are buying a lot of extra things that you don't really need, because it is easy to pay, and you will never run out of cash, because you are always drawing from some treasury that is always online. Earlier, with cash, you go to a bank and get some funds for monthly expenses, and you should be wary of running it out soon, because you ll have to go to the bank again. For bigger expenses, you used a cheque. Now you don't have to think twice before ordering a takeaway that costs 500 bucks. Make all exploitation more efficient. That is the purpose of technology in modern human existence. Technologies that does that, will go mainstream, others fizzle out.
runeks 3y ago
> Consumers prefer safer payment methods for big-ticket items. “I use upi to buy chai. But I wouldn’t use it for a plane ticket,” says one architect based in Mumbai. > There are other flaws with upi. This doesn't sound like a flaw at all to me, but a feature. Why on earth would I want to pay a 2% fee for "consumer protection" when I go to a physical store to buy a can of coke? The reason I do this is only because I have no alternative. Also, there's nothing preventing building an escrow service on top of UPI, as far as I know. This would be useful for online purchases where the seller isn't entirely trustworthy.
- kylehotchkiss 3y ago
  Maybe this is just plane tickets specifically, the government spent like a year and a half yelling at the airlines to refund people in cash and not lousy credits after all the Covid flight cancellations. That was an issue chargebacks would have been very helpful in reducing
hestefisk 3y ago
This is also happening in countries like Thailand and Indonesia with PromptPay and QRIS respectively. Walk past most street stall it’s either cash or QR, no cards.
known 3y ago
[dead]

164 points by saikatsg 3y ago

saikatsg 3y ago

https://archive.is/I3eAI https://archive.is/I3eAI

pokepim 3y ago

[dead]

toomuchtodo 3y ago

India: https://en.wikipedia.org/wiki/Unified_Payments_Interface https://en.wikipedia.org/wiki/Unified_Payments_Interface Brazil: https://en.wikipedia.org/wiki/Pix_(payment_system) https://en.wikipedia.org/wiki/Pix_(payment_system) US: https://en.wikipedia.org/wiki/FedNow https://en.wikipedia.org/wiki/FedNow

cubefox 3y ago
Germany: https://en.m.wikipedia.org/wiki/Giropay https://en.m.wikipedia.org/wiki/Giropay By the way, according the the Wikipedia article, the launch of the US American FedNow service is imminent. I wonder whether it has any chance against the more expensive but widely adopted credit card payments.
- toomuchtodo 3y ago
  Walmart is already preparing to adopt FedNow payments, and submitted comments during the public comment period. https://www.pymnts.com/news/retail/2023/walmart-hints-at-early-fednow-adoption-while-amazon-is-mum-so-far/ https://www.pymnts.com/news/retail/2023/walmart-hints-at-ear... https://www.federalreserve.gov/SECRS/2019/December/20191227/OP-1670/OP-1670_110719_137048_409015547480_1.pdf https://www.federalreserve.gov/SECRS/2019/December/20191227/...
  - cubefox 3y ago
    > Walmart has observed a severe misalignment of incentives that has plagued the payments system in the United States for decades. Certain incumbents and large participants enjoy massive profits by stifling innovation in payments, ensuring that account access is limited to a small number of networks, and perpetuating barriers to entry for alternative solutions. Controlling this access allows the dominant players to extract rents from other payments system participants, ultimately resulting in higher costs for all consumers, particularly consumers who are unbanked or underbanked. They say it how it is.
    - marcosdumay 3y ago
      They are ignoring the systemic manipulation of the entire market against people deemed "undesirable" or that are just poor. But well, they probably never noticed it.
      - deleted 3y ago
        [deleted]
      - hakfoo 3y ago
        In an enemy-of-my-enemy perspective, Walmart comes out as the "good guy" here because their market position aligns best with the unbanked/underbanked audience. Neiman-Marcus is less likely to complain about their audience not having access to modern payment rails; they might kvetch about the cost of accepting a Platinum Amex, but that's a different debate entirely.
- __jonas 3y ago
  but giropay is owned by a private company, not the state or central bank. also it’s an online payment service, not sure you can use it for direct transfers or in person payments like those others
abdullahkhalids 3y ago
Also, Pakistan launched its own last year. Unfortunately, no wiki entry. https://www.sbp.org.pk/dfs/Raast.html https://www.sbp.org.pk/dfs/Raast.html
rnjailamba 3y ago
Singapore: FAST - https://www.abs.org.sg/consumer-banking/fast https://www.abs.org.sg/consumer-banking/fast Thailand: PromptPay - https://www.bangkokbank.com/en/Personal/Digital-Banking/PromptPay https://www.bangkokbank.com/en/Personal/Digital-Banking/Prom... Australia: NPP - https://www.rba.gov.au/payments-and-infrastructure/new-payments-platform/ https://www.rba.gov.au/payments-and-infrastructure/new-payme... Hong Kong: FPS - https://www.hkma.gov.hk/eng/smart-consumers/faster-payment-system/ https://www.hkma.gov.hk/eng/smart-consumers/faster-payment-s... Philippines: InstaPay - https://www.instapayph.com/ https://www.instapayph.com/ Mexico: CoDI - https://www.codi.org.mx/ https://www.codi.org.mx/ Indonesia: BI-FAST - https://www.bi.go.id/en/publikasi/ruang-media/news-release/Pages/sp_2333421.aspx https://www.bi.go.id/en/publikasi/ruang-media/news-release/P...
- martyvis 3y ago
  NPP is fantastic. (Often referred to as PayID, Fast Payment or Osko, depending on your bank here in Australia). Last Friday I was able to buy an item from a friend while we both standing in his driveway - he confirmed the payment on his account. He just provided his BSB (6 digit bank number) and account and I did the transfer. We both use non major banks. I have used it to settle split bills with colleagues after lunches. Usually you just link your mobile number or email address. All without bank fees or going anywhere near Visa, MasterCard or Paypal and confirmed in under a minute.
  - valzam 3y ago
    You can even a phone number instead of use BSB and acc no. Super convenient
- toomuchtodo 3y ago
  Thanks for sharing these links! If someone wants to start a Wikipedia page enumerating global instant payment systems, I'm happy to chip some fiat in. Email in profile.
codethief 3y ago
Europe: SEPA Instant Credit Transfer https://www.europeanpaymentscouncil.eu/what-we-do/sepa-instant-credit-transfer https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta... https://en.wikipedia.org/wiki/Single_Euro_Payments_Area#Schemes https://en.wikipedia.org/wiki/Single_Euro_Payments_Area#Sche... So far it hasn't seen widespread adoption, though.
thasaleni 3y ago
South Africa: Payshap https://www.payshap.co.za/ https://www.payshap.co.za/

mkrishnan 3y ago

[flagged]

crossroadsguy 3y ago
Unless it’s an interpersonal transaction or a business which I frequent or close to where I stay I do not use UPI. The Transaction can remain in “In Processing” for upto 48 hours and then it can go either way. I mean someone had to be especially challenged to not consider this in a modern payment system.
supriyo-biswas 3y ago
It's regrettable and astounding at the same time that a factual comment is getting downvoted. UPI should absolutely introduce a facility to chargeback a transaction, which is why I always prefer to use my credit card, if possible.
- samarthr1 3y ago
  Not sure if you are unfamiliar with the credit cards issued in India, but my bank's fraud protection is limited to "did someone steal your card and make a payment"
  - ta7789 3y ago
    Credit cards work differently in the US compared to the rest of the world. You can just "charge back" the merchant for pretty much any reason.
    - EVa5I7bHFq9mnYK 3y ago
      No, you can't. I tried twice. Banks side with the merchants because merchants pay them, not you.
- cubefox 3y ago
  A credit card costs more in the long run, otherwise credit card companies wouldn't be profitable.

nish1500 3y ago

When you pay a merchant $100 with your card they get about $97. When this $100 has exchanged hands 50 times only $15 remains. The bank owns the other $85. Cash is a hassle but it cuts out the middlemen. We need a unified payment system in western countries, but it's almost impossible given how much of a chokehold big banks have over our economy. Capitalism at its finest.

louwrentius 3y ago
I agree. From what I understood, the Dutch iDeal system (which I love) might become a European standard. It doesn’t cover large parts of the world but I think the fees are not as “insane” as PayPal or systems like this.
- aleph_minus_one 3y ago
  > From what I understood, the Dutch iDeal system (which I love) might become a European standard. What can you tell me about iDeal's privacy aspects? Does it allow anonymous transactions (here it mght make sense to distinguish between - non-anonymous entity sends money to anonymous entity - anonymous entity sends money to non-anonymous entity - anonymous entity sends money to anonymous entity; "anonymous" is here to be understood as "anonymous to iDeal", i.e. iDeal has no practical chance of de-anonymizing this identity)?
  - louwrentius 3y ago
    As far as I know only the Merchant and your account is known to iDeal, not what you buy.
solatic 3y ago
You make it sound like the other $85 that the bank got sits in a vault somewhere, extracted from the economy and hoarded in a stockpile. Actually the banks have their own costs (e.g. salaries) and much of the money is further invested. In fact, the natural state is to keep so little cash on hand that Dodd-Frank forced the banks to hoard more than they otherwise were inclined to. Yes I've oversimplifying a lot of differences (payments infrastructure vs. investment banking, for one) but the point remains. I do think that day-to-day realtime debit-style payments should be a publicly-operated, minimal-or-zero-fee commodity rather than a massive source of rent, but having access to electronic payments for consumer retail is literally responsible for trillions of dollars more economic activity than you would see if we went back to cash-only.

rvz 3y ago

A 'revolution' to on-board users and then airdrop them free money in order for the Reserve Bank of India to deploy their own CBDC on top of UPI. [0] [1] Just like the catastrophic e-Naira and the widely adopted and dystopian digital Yuan this 'revolution' is all about CBDCs. India is being a bit more clever in moving everyone in India on to their e-rupee CBDC and using the UPI hype and free money airdrops to do that. [0] https://techmonitor.ai/policy/digital-economy/nobodys-using-cbdcs-indias-piloting-one-anyway https://techmonitor.ai/policy/digital-economy/nobodys-using-... [1] https://indianexpress.com/article/explained/what-is-e-rupi-digital-currency-india-pm-modi-7433637/ https://indianexpress.com/article/explained/what-is-e-rupi-d...

cuteboy19 3y ago
Although cbdc is a goal, the main purpose of UPI is simplified digital payments. UPI grew because of its technical superiority to existing methods, even regular people could see that difference. It's not because of incentives that it is so popular and most people never recieved them
- rvz 3y ago
  So that governments can track, freeze and seize your funds at will or add savings limits to your account to get you to spend more and save less. [0] [1] Once the government does something extremely unpopular, I will only see the same thing that happened with the trucker protesters with their bank accounts getting frozen which will happen in other countries for just protesting [2] and next time, CBDCs will play a significant role on who actually controls your money and they will do anything like banning the use of ATMs [3] to get you to use CBDCs. [0] https://www.premiumtimesng.com/business/business-news/571691-just-in-cbn-amends-cash-withdrawal-policy-raises-weekly-limits.html https://www.premiumtimesng.com/business/business-news/571691... [1] https://reclaimthenet.org/digital-euro-spending-saving-limits https://reclaimthenet.org/digital-euro-spending-saving-limit... [2] https://www.newsweek.com/banks-have-begun-freezing-accounts-linked-trucker-protest-1680649 https://www.newsweek.com/banks-have-begun-freezing-accounts-... [3] https://www.pymnts.com/cbdc/2022/nigeria-cuts-atm-cash-withdrawals-and-urges-enaira-use/ https://www.pymnts.com/cbdc/2022/nigeria-cuts-atm-cash-withd...

photochemsyn 3y ago

[flagged]

FpUser 3y ago
>"where every transaction you ever partake in is authorised and recorded by a privately run commercial bank" Isn't it the same in The West bar cash transaction? >"If such a bank does not like an enterprise – such as Wikileaks – it can just freeze it out" Same question again. For example in Canada they did just that during tracker's convoy. I am not telling we are at their level (yet) but the direction ever country seems to be moving in looks like for more government / big corps spying and control.
- SantalBlush 3y ago
  I think there is a rather large class of people who are just fine with oppressive regimes, as long as it doesn't affect them. The pretense is always "reducing crime". This includes a lot of self-proclaimed pro-freedom types, as well. They'll support an oppressive regime so long as their own freedoms aren't restricted, and the problem grows.
blntechie 3y ago
How is it different from any digital payment? Many European countries and the US has been doing digital transactions for like 2 decades now. How was it not authoritarian then but suddenly when the Asian people do it, it's a way to track everything people does and not the simplest explanation which is it makes transactions easier?
- stavros 3y ago
  It's authoritarian here as well, who said the opposite? Digital payments are a privacy nightmare.
- aleph_minus_one 3y ago
  > Many European countries and the US has been doing digital transactions for like 2 decades now. How was it not authoritarian Many German people are still deeply distrusting of digital money transactions (keep in mind that there were two dictatorial regimes on German soil in the 20th century, of which one only ceased to exist little more than 30 years ago). > How was it not authoritarian then but suddenly when the Asian people do it, it's a way to track everything people does These people typically rather think that Asians should not make the same mistake (ignoring dangerous surveillance aspects).

lucasfcosta 3y ago

As a note, this is slightly incorrect: > The Indian model is inspiring others. Brazil’s Pix, which facilitates bank-to-bank payments with a small fee, was launched in November 2020. It now accounts for some 30% of Brazil’s electronic payments (credit and debit cards take up around 20% each) In fact, Pix is free, which is the main reason why the Brazilian population adopted it so widely and so quickly. Before Pix, you'd always have to pay a significant fee to make bank transfers, and they could end up taking a whole day to go through.

rozularen 3y ago
in Spain there's Bizum
Carioca 3y ago
Nitpick: Pix is free between people. Companies pay ~1% of the transaction
- stefan_ 3y ago
  That is crazy high, cash back credit card levels
- rippercushions 3y ago
  Nope, on average 0.22%. https://www.reuters.com/article/brazil-cenbank-pix-idUSL2N2VP316 https://www.reuters.com/article/brazil-cenbank-pix-idUSL2N2V...

braindead_in 3y ago

Just one mention of India Stack and no mention of iSpirit/Sharad Sharma at all. They were the brains behind it all. I hope they do something with LLMs as well.

fnord77 3y ago

sounds like the exact opposite of crypto

alephnerd 3y ago
Yep, and it's actually useful for unbanked people. It's essentially a digitized version of Postal Saving Systems [0] that were traditionally common in Central and Eastern Europe. Tbf, a lot of the thought leadership done to design UPI+IndiaStack was done by people with an actual background in Developmental Economics+Banking at JPAL (MIT+Harvard), FSI (Stanford), and BFI (UChicago). A lot of Policy Advising in India+China+ASEAN is done by alumni of those 3 programs. [0] - https://en.m.wikipedia.org/wiki/Postal_savings_system https://en.m.wikipedia.org/wiki/Postal_savings_system

illegalmemory 3y ago

I simply love UPI! I have seen this firsthand in remote villages and it has completely changed how small merchants accept money. Recently, while I was in Goa and even out in the ocean off the coast, the ease with which I was able to make payments was out of this world.

HeavyFeather 3y ago
> in remote villages > the ease with which I was able to make payments I find it hard to believe that handing cash was "hard" in any way.
- b345 3y ago
  Getting cash is hard where there are no ATMs and you aren't offering any services

colesantiago 3y ago

I'm so happy that payment rails services such as UPI, PIX and the like are getting more attention. This is a breath of fresh air compared to last years vile crypto fad. I'm hoping FedNow in the US completely wipes crypto and the world will follow on from what India and Brazil has done. Bravo!

WinstonSmith84 3y ago
Mass surveillance, yay! Fed ... what? Anyway, do not worry, your hopes will be fulfilled very soon in the US with the arrival of the digital dollar. More control and surveillance, how delighting!
- cubefox 3y ago
  Less control, if anything. Remember how credit card companies blocked WikiLeaks and Pornhub?
  - WinstonSmith84 3y ago
    How could that be less control when it will be in fact a centralized database? Remember how much trouble it was for the Canadian government to freeze the accounts of the Canadian truckers? Now it will just be a request to an "admin"...
    - cubefox 3y ago
      Is it really centralized?
      - WinstonSmith84 3y ago
        It will be, that's what CB in CBDC is about. If you wonder what Governments may / will do with CBDC, here is something which shall be enlightening https://cointelegraph.com/news/the-world-could-be-facing-a-dark-future-thanks-to-cbdcs https://cointelegraph.com/news/the-world-could-be-facing-a-d...

new2yc 3y ago

[flagged]

perryizgr8 3y ago
> have started to put transxn fees on UPI transactions Huh? I don't think so.
- new2yc 3y ago
  There you go: [livemint](https://www.livemint.com/news/india/upi-payments-to-now-cost-more-who-will-pay-and-what-are-the-charges-explained-11680162141068.html https://www.livemint.com/news/india/upi-payments-to-now-cost...). You can argue that it is for above 2000 INR, or just for merchants (street vendors?). Implemented on all UPI providers. Also, these corps. also put up random charges -- like any big company, e.g., Platform Fees on recharges at [Paytm](https://www.livemint.com/technology/paytm-starts-levying-platform-fee-for-recharges-check-the-details-here-11654878385753.html https://www.livemint.com/technology/paytm-starts-levying-pla...).
twoclicksnorth 3y ago
> The Indian Govt. has already shown their intentions in their parliament. Running Payment infrastructure have a cost for banks. somebody has to pay for it though taxes or fees. > RBI has became a puppet of it (shown by their actions time and time). They tried getting judiciary (SC) but couldn't get it this time. RBI is central bank. Its a statutory institution that is answerable to Elected Govt what are you expecting ? Its the Supreme court regularly oversteps its limits and plays govt. > The big UPI mandates corps. (PhonePe, Paytm, and GPay), in India, have started to put transxn fees on UPI transactions. Only for transactions greater than 2000 and that too very low. This wouldn't affect poor at all. > Just like cryptocurrencies (no regulations whatsoever but flat 30% on all the profits), the govt. will find a way to get the juice out of UPI sooner or later. All thanks to that dumb finance minister. Cryptocurrencies are a grift and Govt is right to ban it. Say what you will of the Govt about stupid religious policies and idiotic and pompous schemes and outright undemocratic policing situation but so far gov has done a good job as far as fiscal health and Currency stability are concerned.

ledgerdev 3y ago

Any possibility for some regional/local/state payment system in the US that's not a 3% tax on every purchase?

cubefox 3y ago
Someone else posted this: https://en.m.wikipedia.org/wiki/FedNow https://en.m.wikipedia.org/wiki/FedNow > FedNow is a service developed by the Federal Reserve for depository institutions in the United States. It will enable individuals and businesses to send and receive instant payments.[1][2][3][4] Banks will be able to build products on top of the FedNow platform.[5] > FedNow is scheduled to begin formal certification of participants of the program in April 2023, with a formal launch planned for July 2023.[6][7] It will operate on a 24-hour, 365-days-a-year basis,[8] as opposed to the U.S. government's current system that is closed on weekends and holidays.[9][10] FedNow's transaction costs are expected to be about one-fifth the cost of existing payment solutions, which cost merchants an average of $0.23 per transaction.[5][clarification needed]

nine_zeros 3y ago

UPI is the best! It is like Mastercard, stripe, bank transfers, Venmo and goolf ol cash combined, only that it is available as a free public utility. If they only introduce a way to do chargebacks (or a fair dispute mechanism), the remaining few cash transactions will go away too.

Proven 3y ago
[dead]

cvjcvjcvj 3y ago

There are no fee at all using Brazil's pix.

ta7789 3y ago

People seem to have a general distrust about the Indian government and the UPI system. There are certainly a lot of conspiracy theories floating around. The plain idea of UPI is that it is publicly funded digital infrastructure. The US has networks such as Mastercard, Visa, etc. These are privately run digital infrastructure that facilitate digital payments. UPI is publicly funded digital infrastructure. AFAIK it is legal for private digital infrastructure such as Visa, MC, etc to exist. However, due to the tax payer funded nature of UPI the fees are way lower than private digital infrastructure can offer. This has been the main criticism against it by the private players. Let's be clear, governments everywhere build roads using taxes and offers them for "free" to the citizens. That doesn't stop private entities from creating private roads for a fee. However, no private entity tries to build road infrastructure as it is not a profitable business. Thats the same situation with digital payments in India due to UPI's existence. That doesn't mean that private businesses cannot offer their own private payment networks with value added services to compete with UPI. The mindset in the west is very different than the east which leads to a whole lot of unfounded criticism on here.

padiyar83 3y ago
Thank you for bringing this clarity. And as an Indian citizen I am glad we took this step towards building an independent payments infrastructure, given how critical a payments clearance system is to the functioning of a modern economy. I don't want other governments to hold us hostage through Visa's and Mastercard's where we are just one sanction away from economic meltdown. Just like what happened recently in Russia. As a country we should be looking at securing other such critical support systems - Power control systems, Telecom hardware etc. That's the only way IMO to be truly independent!
- ta7789 3y ago
  Absolutely, the US government has a long tradition of weaponizing US Dollar and SWIFT to cut off countries from global trade. This is a fact that has been happening ever since the petrodollar was invented. Governments all over the world, especially India, have realized this is a big vulnerability and a threat to their country's sovereignty. India, Brazil and several countries across the world have invested in their own infrastructure as they rightly should to keep their economic independence. For those who don't know India has been on the receiving end of US sanctions for a variety of reasons. While the reasoning behind the sanctions has been long debated, it is plainly obvious from the Indian vantage point that economic independence is very critical for their survival.

SanjayMehta 3y ago

The comments in this thread lack some context. Prior to UPI, the government ensured that anyone with a mobile phone, even just a feature phone, could open a bank account. This enabled direct transfer of subsidies to eligible citizens. An earlier PM Rajiv Gandhi had admitted that only 15% of benefits actually reached the intended recipients, the rest being consumed in overheads and corruption. UPI ensures that even people in remote locations can make payments without having to walk long distances to withdraw theirbcash from a bank. Villages don't have ATMs. It's more like a debit card than anything else, but you use a phone instead of a card. As for tracking fears, all debit/credit card transactions are logged so UPI is no different. If you want to use cash, you can do so, but you'd be surprised how many vendors prefer UPI as they don't have to worry about change.

ft-kenya-claims 3y ago

The article repeats a claim discussed by https://www.tandfonline.com/doi/pdf/10.1080/03056244.2019.1614552?download=true https://www.tandfonline.com/doi/pdf/10.1080/03056244.2019.16... "that ‘access to the Kenyan mobile money system M-PESA increased per capita consumption levels and lifted 194,000 households, or 2% of Kenyan households, out of poverty’ (Suri and Jack 2016, 1288). It is no exaggeration to say that this article and its specific poverty reduction claim have electrified the international development community." "If Suri and Jack’s claims are broadly verifiable, then here we have one of the most important anti-poverty interventions of recent history. Anyone concerned with addressing global poverty, including the current authors, should be very happy indeed. However, extreme caution is warranted. This is because the recent history of the international development community is, unfortunately, littered with claims of miraculous poverty-reducing policy interventions, a great many of which are then shown at a later date to be quite ineffective" The authors critique the M-PESA claims on six grounds: * Impact of exit not discussed: "while it is relatively easy to provide financial and other stimuli to encourage certain groups to move into petty entrepreneurship, if there is no commensurate increase in local demand at the same time then the zero-sum end result is simply the redistribution of local demand among a larger number of market participants" * Impact of displacement ignored: "There is [...] no attempt to compare the outcomes of those households managing to establish or expand a tiny retail business with the help of M-Pesa, and those households in the same community that have no engagement with M-Pesa but are already in possession of, and therefore survive because of, a tiny retail business." * Rising over-indebtedness in Kenya: "they choose to measure specific household increases in incomes and savings attributable to M-Pesa, but fail to calculate the impact of the wider (but gradual) increases in debt also attributable to M-Pesa. Over-indebtedness has been rising to dangerous levels in almost all parts of the global South where access to microcredit has been facilitated by the international development community" * Accumulation by dispossession: "as of 2018, the ownership of M-Pesa resides with the Kenya-registered company, Safaricom. [... which] is today 40% owned by the UK multinational Vodafone plc [...] [Safaricom] alone accounts for a massive 40% of the total stock market valuation on the Nairobi securities exchange" * Wealthy versus poor networks: "the increase in consumption they observe could simply result from wealth being passed along fin-tech-enabled linkages to others in the same family or social circle or class." * Flawed impact evaluation methodology: "M-Pesa agents, just as with other financial units seeking profit elsewhere in Africa, are well known for proliferating in wealthier urban areas where there are more opportunities to obtain large client numbers and wealthier clients, the combination of which is more likely to generate higher financial returns" The authors conclude: "There is little doubt that fin-tech has the potential to liberate enormous value. The digital finance sector has been expanding at a mind-boggling rate from China to Southeast Asia, from Africa to Latin America. But the core problem as it stands – as illustrated in Kenya and other places around the world – is that the bulk of this value does not go to the poor. Rather, fin-tech is very clearly designed to hoover up value and deposit it into the hands of a narrow global digital-financial elite that are the main forces behind the fin-tech revolution. Of course, this enormous wealth could be redirected towards Kenya’s poor population and reinvested locally, for example through community-owned financial institutions and financial cooperatives, but there would appear to be little time, sympathy, or political support for building such pro-poor institutions when so much wealth can be appropriated by so few so quickly in another way."

kylehotchkiss 3y ago

I wish there were better ways to use UPI as a tourist. Like if wise.com could support QR code payments to it. Right now the system isn’t very accessible to those on short term visits.

ffpip 3y ago
https://travel.economictimes.indiatimes.com/news/technology/foreign-tourists-travellers-in-india-can-now-make-payments-using-upi-know-more-details/98179802 https://travel.economictimes.indiatimes.com/news/technology/... (Foreign tourists & travellers in India can now make payments using UPI)
- kylehotchkiss 3y ago
  Interesting! It took me a lot of googling after reading to figure this out… The international airports have Thomas Cook booths for exchanging cash to rupees. They now allow foreigners to create an account on this app called “fave” which they can reload only at the airport. This is limited only to g20 countries (that’s an odd requirement considering many wealthy countries aren’t in g20). It’s a start but still way too complicated to figure out after 10 hour flight and stressful airport entry. I hope they improve by integrating recharge by PayPal or another internationally useful service.
  - ffpip 3y ago
    > that’s an odd requirement considering many wealthy countries aren’t in g20 It was during the G20 convention, so probably to promote it in some way

devnull3 3y ago

As a big fan of UPI, I have a concern if people became too much dependent on it. What happens when there is a power outage for extended period of time (due to war, natural calamity, grid failure, etc)? Most shops in India do not have backup power provisioned.

chupchap 3y ago
In such a scenario only cash works.
abhayhegde 3y ago
You're talking about all hell breaks loose kind of situations and anything basic would be a concern then, let alone UPI not working. There's no universal solutions for such situations. That doesn't mean the country shouldn't be too dependent on UPI.

deleted 3y ago

[deleted]

villgax 3y ago

UPI is just a simpler IMPS(which used mobile number) with email address like handle which again is either mobile@bank or email/name@bank just like Venmo. Nothing revolutionary at all. There is no customer care that you can call & have your problems addressed, you still need to go to your bank for any issues or refunds coz for some reason Indians are not exactly entrusted with being able to raise chargebacks

himujjal 3y ago

Weird there are even negative comments about UPI. That too from people who haven't lived in pre-UPI era. My father and my uncle both have had history of losing cash to robbery earlier in the past in broad daylight. Snatch and run. Huge amounts of cash. My wallet has not seen any paper-based cash in over 1-2 years now and I live in a Tier-4 town/city. The habit of not giving the extra 1-2 rupees of extra change has gone. Now, its the exact amount. Plus no one these days have to loan out payments. You can directly pay the amount quick. The scale and the way UPI has become such an integral part of Indian lives is such so much valuable that the minor inconveniences (Privacy & customer care) are ignorable.

creaper 3y ago
>The habit of not giving the extra 1-2 rupees of extra change has gone. Yea, but I bet you are buying a lot of extra things that you don't really need, because it is easy to pay, and you will never run out of cash, because you are always drawing from some treasury that is always online. Earlier, with cash, you go to a bank and get some funds for monthly expenses, and you should be wary of running it out soon, because you ll have to go to the bank again. For bigger expenses, you used a cheque. Now you don't have to think twice before ordering a takeaway that costs 500 bucks. Make all exploitation more efficient. That is the purpose of technology in modern human existence. Technologies that does that, will go mainstream, others fizzle out.

runeks 3y ago

> Consumers prefer safer payment methods for big-ticket items. “I use upi to buy chai. But I wouldn’t use it for a plane ticket,” says one architect based in Mumbai. > There are other flaws with upi. This doesn't sound like a flaw at all to me, but a feature. Why on earth would I want to pay a 2% fee for "consumer protection" when I go to a physical store to buy a can of coke? The reason I do this is only because I have no alternative. Also, there's nothing preventing building an escrow service on top of UPI, as far as I know. This would be useful for online purchases where the seller isn't entirely trustworthy.

kylehotchkiss 3y ago
Maybe this is just plane tickets specifically, the government spent like a year and a half yelling at the airlines to refund people in cash and not lousy credits after all the Covid flight cancellations. That was an issue chargebacks would have been very helpful in reducing

hestefisk 3y ago

This is also happening in countries like Thailand and Indonesia with PromptPay and QRIS respectively. Walk past most street stall it’s either cash or QR, no cards.

known 3y ago

[dead]