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The most incredible thing about UPI is how it was embraced by even the poorest in the remote corners of India. One of the former finance ministers of India talk

by db1234 3y ago

The most incredible thing about UPI is how it was embraced by even the poorest in the remote corners of India. One of the former finance ministers of India talked in a dismissive tone in the parliament about rural India adopting digital payments when the current government announced "Digital India" plan. Some one made a meme video out of it mocking him. https://www.youtube.com/watch?v=aCnv8gwN0ug https://www.youtube.com/watch?v=aCnv8gwN0ug Another video showing the ingenuity of a road side vendor https://www.youtube.com/watch?v=uY2156ecRDQ https://www.youtube.com/watch?v=uY2156ecRDQ

gmerc 3y ago
Jiophone helped a lot
- mavelikara 3y ago
  Pulling currency from circulation overnight also did.
  - hiyer 3y ago
    Not so much, actually. What really led to the rapid uptake of UPI was Covid and people's reluctance to handle cash as a result of it.
    - unmole 3y ago
      > What really led to the rapid uptake of UPI was Covid and people's reluctance to handle cash as a result of it. That timeline doesn't make sense. UPI was already a spectacular success by 2019.
      - sateesh 3y ago
        In 2019 it was gaining traction, as the article shows the volume of transactions were around 1 billion per month in March 2019.
        uwagar 3y ago
        the opportunity to mine all this data by the government for any policy or intervention cannot be underestimated.
    - mavelikara 3y ago
      Good point.
    - vijaybritto 3y ago
      This is inaccurate. COVID solidified what was already growing in usage. The really stupid demonetisation exercise was the main factor
- searchableguy 3y ago
  Jio's push for 4G and unlimited data packs helped a lot as well. Pre-jio, internet was too expensive, unreliable, and slow to use frequently. I'm amazed by their recent 5G coverage in the country too. Getting unlimited 1gbps in a lot of tier 2 and 3 cities at $3.5 a month. Unbelievable
smfugit 3y ago
Dont get carried away by tech thats offered for "free". Even if you subtract all the margins corporations (visa/mastercard etc) extract there is a gigantic bill when you make services free for everyone. Everything is beautiful when google, youtube, fb, twitter offered their stuff for free. But we know the true cost 20 years later. Sooner or later some one has to foot the bill. In this case a very small pool of indian tax payers.
- vinay_ys 3y ago
  There are 5 parties in UPI (or any payment system really): 1. bank customers, 2. bank, 3. payment network, 4. 3rdparty apps (TPAPs) 5. merchants. UPI is free for #1. It costs #2, #3, #4 to build and operate the systems. So, #5 pays for accepting payments in UPI. But what they pay is far less than what it costs them to accept payments via other means including cash. Also, #2 pays somewhat because it is a service their customer values. Banks also like it because the network fees are far cheaper than other networks like Mastercard and Visa. Naively someone might think paying and accepting in cash is free. But reality is cash handling can get expensive – leakages (cashier steals), counting and tallying cash, time lost in going to bank branch to deposit cash, dealing with providing exact change etc. are all expensive once you see how convenient and highly productive digital payments is.
vinay_ys 3y ago
Super affordable smartphones and cheap and fast 4G data, great apps like GPay and PhonePe with lots of gamification and cashbacks and ubiquitous merchant acceptance through apps like PayTM, PhonePe and GPay were key drivers for this. Then, demonetization and covid were accelerants to achieve critical mass. Post 2022, its been unstoppable.
- uwagar 3y ago
  one conspiratorily wonders if its a government ploy to turn everyone cashless so that they can be debanked at will.
  - Aerbil313 3y ago
    Cash is a less than optimally efficient part of the current economic systems, not unlike credit cards are The logical conclusion of technological development in this area would be something like a micro hardware security key storing blockchain wallet keys implanted inside your hand, activated by your thoughts or a certain movement or something, at least as far as I guess.
heavenlyblue 3y ago
If that road side vendor doesn't have access to a phone, how does she know the payment was made?
- SandraBucky 3y ago
  they usually have a sound box, which will announce if a payment is made to their UPI id. Related - https://restofworld.org/2023/india-sound-boxes-paytm-phonepe/ https://restofworld.org/2023/india-sound-boxes-paytm-phonepe...
  - fuzztester 3y ago
    there was an article about this on some news website recently. maybe the above one. ... i read, it is that one. good article.
- DecoPerson 3y ago
  The banks provide 4G-enabled speakers either for free or very cheap. These speakers automatically read out any credit into the account. Even a vendor who can’t read can use UPI to reliably receive payments.

by db1234 3y ago

gmerc 3y ago

Jiophone helped a lot

mavelikara 3y ago
Pulling currency from circulation overnight also did.
- hiyer 3y ago
  Not so much, actually. What really led to the rapid uptake of UPI was Covid and people's reluctance to handle cash as a result of it.
  - unmole 3y ago
    > What really led to the rapid uptake of UPI was Covid and people's reluctance to handle cash as a result of it. That timeline doesn't make sense. UPI was already a spectacular success by 2019.
    - sateesh 3y ago
      In 2019 it was gaining traction, as the article shows the volume of transactions were around 1 billion per month in March 2019.
      - uwagar 3y ago
        the opportunity to mine all this data by the government for any policy or intervention cannot be underestimated.
  - mavelikara 3y ago
    Good point.
  - vijaybritto 3y ago
    This is inaccurate. COVID solidified what was already growing in usage. The really stupid demonetisation exercise was the main factor
searchableguy 3y ago
Jio's push for 4G and unlimited data packs helped a lot as well. Pre-jio, internet was too expensive, unreliable, and slow to use frequently. I'm amazed by their recent 5G coverage in the country too. Getting unlimited 1gbps in a lot of tier 2 and 3 cities at $3.5 a month. Unbelievable

smfugit 3y ago

Dont get carried away by tech thats offered for "free". Even if you subtract all the margins corporations (visa/mastercard etc) extract there is a gigantic bill when you make services free for everyone. Everything is beautiful when google, youtube, fb, twitter offered their stuff for free. But we know the true cost 20 years later. Sooner or later some one has to foot the bill. In this case a very small pool of indian tax payers.

vinay_ys 3y ago
There are 5 parties in UPI (or any payment system really): 1. bank customers, 2. bank, 3. payment network, 4. 3rdparty apps (TPAPs) 5. merchants. UPI is free for #1. It costs #2, #3, #4 to build and operate the systems. So, #5 pays for accepting payments in UPI. But what they pay is far less than what it costs them to accept payments via other means including cash. Also, #2 pays somewhat because it is a service their customer values. Banks also like it because the network fees are far cheaper than other networks like Mastercard and Visa. Naively someone might think paying and accepting in cash is free. But reality is cash handling can get expensive – leakages (cashier steals), counting and tallying cash, time lost in going to bank branch to deposit cash, dealing with providing exact change etc. are all expensive once you see how convenient and highly productive digital payments is.

vinay_ys 3y ago

Super affordable smartphones and cheap and fast 4G data, great apps like GPay and PhonePe with lots of gamification and cashbacks and ubiquitous merchant acceptance through apps like PayTM, PhonePe and GPay were key drivers for this. Then, demonetization and covid were accelerants to achieve critical mass. Post 2022, its been unstoppable.

uwagar 3y ago
one conspiratorily wonders if its a government ploy to turn everyone cashless so that they can be debanked at will.
- Aerbil313 3y ago
  Cash is a less than optimally efficient part of the current economic systems, not unlike credit cards are The logical conclusion of technological development in this area would be something like a micro hardware security key storing blockchain wallet keys implanted inside your hand, activated by your thoughts or a certain movement or something, at least as far as I guess.

heavenlyblue 3y ago

If that road side vendor doesn't have access to a phone, how does she know the payment was made?

SandraBucky 3y ago
they usually have a sound box, which will announce if a payment is made to their UPI id. Related - https://restofworld.org/2023/india-sound-boxes-paytm-phonepe/ https://restofworld.org/2023/india-sound-boxes-paytm-phonepe...
- fuzztester 3y ago
  there was an article about this on some news website recently. maybe the above one. ... i read, it is that one. good article.
DecoPerson 3y ago
The banks provide 4G-enabled speakers either for free or very cheap. These speakers automatically read out any credit into the account. Even a vendor who can’t read can use UPI to reliably receive payments.