5 ms·

Alice registers as a merchant and has her friend Bob pay her a large amount of money using a UPI enabled credit card. Neither Alice nor Bob paid any transaction

by unmole 3y ago

Alice registers as a merchant and has her friend Bob pay her a large amount of money using a UPI enabled credit card. Neither Alice nor Bob paid any transaction charges. Alice sticks the money in a high interest bank account and returns the money to Bob after 30 days along with half of the interest she earned. Bob pays off his credit card bill before the due date and therefore isn't charged any interest. Alice and Bob have made money out of thin air.

samarthr1 3y ago
To register as a merchant, a reasonably large (i think) turnover is needed, in a sustained manner ( iirc a few months). The UPI over credit card is primarily there for peer-peee merchant transactions...
- unmole 3y ago
  > To register as a merchant, a reasonably large (i think) turnover is needed, in a sustained manner ( iirc a few months). Nope. Signing up as a merchant is simply the matter of downloading the business version of GPay or Paytm and submitting minimal KYC documents. > peer-peee merchant Did not understand this part.
  - samarthr1 3y ago
    Sorry, was on mobile typing that, and turns out I was wrong. The UPI over credit card is only for Peer to Merchant transactions. To be a merchant (As against a peer merchant), you must have a month over month inflow of atleast 50,000 INR, for 3 months after being onboarded as a peer-merchant. [1] I think you were talking about registering as a peer-merchant, not a "proper" merchant! MDR etc cannot be charged on peer-merchants[1], and are essentially peers, but with restricted purpose codes that they can accept money for. [1] https://www.npci.org.in/PDF/npci/upi/circular/2019/Circular%2070%20-%20Introduction%20of%20P2PM%20category%20in%20UPI%20for%20unorganised%20or%20small%20merchants.pdf https://www.npci.org.in/PDF/npci/upi/circular/2019/Circular%...
    - unmole 3y ago
      The circular is out of date. Having helped people register for for GPay and Paytm business accounts, I know for a fact that this is no longer true.
fmobus 3y ago
I don't think that kind of fraud would work in the Pix system. Pix transactions are debit, so Bob is out of the money immediately. Of course, it is possible there might be some bank offering a pix-enabled credit card, but I don't see how they'd have any incentive, precisely because people could start doing that.

by unmole 3y ago

samarthr1 3y ago

To register as a merchant, a reasonably large (i think) turnover is needed, in a sustained manner ( iirc a few months). The UPI over credit card is primarily there for peer-peee merchant transactions...

unmole 3y ago
> To register as a merchant, a reasonably large (i think) turnover is needed, in a sustained manner ( iirc a few months). Nope. Signing up as a merchant is simply the matter of downloading the business version of GPay or Paytm and submitting minimal KYC documents. > peer-peee merchant Did not understand this part.
- samarthr1 3y ago
  Sorry, was on mobile typing that, and turns out I was wrong. The UPI over credit card is only for Peer to Merchant transactions. To be a merchant (As against a peer merchant), you must have a month over month inflow of atleast 50,000 INR, for 3 months after being onboarded as a peer-merchant. [1] I think you were talking about registering as a peer-merchant, not a "proper" merchant! MDR etc cannot be charged on peer-merchants[1], and are essentially peers, but with restricted purpose codes that they can accept money for. [1] https://www.npci.org.in/PDF/npci/upi/circular/2019/Circular%2070%20-%20Introduction%20of%20P2PM%20category%20in%20UPI%20for%20unorganised%20or%20small%20merchants.pdf https://www.npci.org.in/PDF/npci/upi/circular/2019/Circular%...
  - unmole 3y ago
    The circular is out of date. Having helped people register for for GPay and Paytm business accounts, I know for a fact that this is no longer true.

fmobus 3y ago

I don't think that kind of fraud would work in the Pix system. Pix transactions are debit, so Bob is out of the money immediately. Of course, it is possible there might be some bank offering a pix-enabled credit card, but I don't see how they'd have any incentive, precisely because people could start doing that.