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When India moved to UPI in the last few years something very interesting happened. The same devices that accept UPI (usually some android based POS) also accept

When India moved to UPI in the last few years something very interesting happened. The same devices that accept UPI (usually some android based POS) also accepted a plethora of cards. Previously merchants would be hesitant to take anything other than cash or charge 2% for visa/mastercard. But with wide adoption of digital payments they now just accept any payment with the goal that they don't want bad reviews and/or lose customers. Point being that with a cheap alternative, it's actually much more convenient now to use a Visa or Mastercard especially with tap to pay because with competition being so high, the diversity means people allow all payments.

hirako2000 8mo ago
You mean that the 2% something visa/Mastercard demand, is far more digestible by merchants when it doesn't represent the majority of their revenue?
- compounding_it 8mo ago
  If previously 3 merchants had visa / Mastercard out of 10 who only accepted cash or cheques, then with UPI all 10 now accept UPI but 7 or 8 accept a universal POS which allows more type of payments. If previously 10% payments were via cards that costed them 2%, then now if sales are 2-3x because of UPI and online payments, letting go of that 2% for even 20% share of cards is fine because they captured a larger market with more sales. Not so long ago, India was a cash dominant economy so UPI actually opened that up. UPI actually helped Visa and Mastercard. Credit card spending has gone up a lot because of digitalization. If in EU a local payment system captures the cash market, then the habit of using digital payments will actually also help Visa and Mastercard make more sale. I currently don't have a credit card, but when I do, I find paying by a Visa/MasterCard much more preferable than UPI, simply because it's easier by tapping.
  - hdra 8mo ago
    >simply because it's easier by tapping i was under the impression UPI is just the underlying protocol, but an interface can be built on top be it tapping/QR/others? is that not the case?
    - compounding_it 8mo ago
      I don’t see why there can’t be tap to pay via UPI. There is no holding back when it comes to technology. But it’s not implemented yet. We still have high corruption. Maybe they don’t want to make digital payments too easy that people forget cash. Just enough to win elections.
  - hirako2000 8mo ago
    The same argument can be made that advertising boosts sales. That doordash makes local eateries more prosperous. It would elevate the debate if we acknowledge the dark patterns these business came up with to extract rents from the economy. That a category actor greatly benefits that's the outcome of any disrupting tech.
leosanchez 8mo ago
> But with wide adoption of digital payments they now just accept any payment with the goal that they don't want bad reviews and/or lose customers. My experience is opposite, Now with UPI which 99% of people have access to there is no incentive for people to accept Credit Cards.
- compounding_it 8mo ago
  The competition is high with online ordering (which accepts cards), so the incentive is to not lose customers. in fact people have become so desperate for more sales that they would let you take something and pay later but not lose you as a customer.
  - leosanchez 8mo ago
    I was talking about small businesses like restaurants which generally used to accept credit card even before UPI. Now very few accept credit cards. Even before UPI credit cards were common accepted online. So I am not sure about that as well.
    - compounding_it 8mo ago
      Small businesses generally dont because the setup for a merchant POS is quite a bit of hassle. In fact maintaining that device also costs money. A UPI merchant on the other hand is quite easy and free from what I know. This setup with visa mastercard might change in the future (with square like devices). However there is also a security problem so fraud might increase with that. Very interesting times for visa and mastercard who have basically not innovated since their existence and yet somehow have grown so big.
kylehotchkiss 8mo ago
I was there when this started to roll this out - I remember a lot of nice pine labs payment terminals - it was really nice that I could begin to depend on my American Express card there more than trying to finagle cash (2000inr bills get you a lot of frustrated service workers). I say AmEx because they tended to work much better than my visa there.
- compounding_it 8mo ago
  That’s how all my non resident friends pay. They have chase bofa discover Amex etc cards that they use to pay most places. Ease of payments is the catch and credit cards bring that process down a lot. There is something psychological going on with cards that UPI and ApplePay simply don’t have. Swiping probably was fastest.
  - kylehotchkiss 8mo ago
    Apple Pay did not work when I was there (2018-2021). Does it now? I'm planning my next trip and little things like Apple Pay go a long way :)
    - compounding_it 8mo ago
      Nope it doesn’t but it’s coming soon apparently. I’m assuming these POS just get a firmware update to get it to work.
shaokind 8mo ago
Anecdata here, but the last times I tried to use VISA/MasterCard in a shopping mall meant to serve people from all over the world, it just did not work. UPI was flawless, though. (And then as pointed out, anyone smaller straight up doesn’t support anything outside of UPI.)

hirako2000 8mo ago

You mean that the 2% something visa/Mastercard demand, is far more digestible by merchants when it doesn't represent the majority of their revenue?

compounding_it 8mo ago
If previously 3 merchants had visa / Mastercard out of 10 who only accepted cash or cheques, then with UPI all 10 now accept UPI but 7 or 8 accept a universal POS which allows more type of payments. If previously 10% payments were via cards that costed them 2%, then now if sales are 2-3x because of UPI and online payments, letting go of that 2% for even 20% share of cards is fine because they captured a larger market with more sales. Not so long ago, India was a cash dominant economy so UPI actually opened that up. UPI actually helped Visa and Mastercard. Credit card spending has gone up a lot because of digitalization. If in EU a local payment system captures the cash market, then the habit of using digital payments will actually also help Visa and Mastercard make more sale. I currently don't have a credit card, but when I do, I find paying by a Visa/MasterCard much more preferable than UPI, simply because it's easier by tapping.
- hdra 8mo ago
  >simply because it's easier by tapping i was under the impression UPI is just the underlying protocol, but an interface can be built on top be it tapping/QR/others? is that not the case?
  - compounding_it 8mo ago
    I don’t see why there can’t be tap to pay via UPI. There is no holding back when it comes to technology. But it’s not implemented yet. We still have high corruption. Maybe they don’t want to make digital payments too easy that people forget cash. Just enough to win elections.
- hirako2000 8mo ago
  The same argument can be made that advertising boosts sales. That doordash makes local eateries more prosperous. It would elevate the debate if we acknowledge the dark patterns these business came up with to extract rents from the economy. That a category actor greatly benefits that's the outcome of any disrupting tech.

leosanchez 8mo ago

> But with wide adoption of digital payments they now just accept any payment with the goal that they don't want bad reviews and/or lose customers. My experience is opposite, Now with UPI which 99% of people have access to there is no incentive for people to accept Credit Cards.

compounding_it 8mo ago
The competition is high with online ordering (which accepts cards), so the incentive is to not lose customers. in fact people have become so desperate for more sales that they would let you take something and pay later but not lose you as a customer.
- leosanchez 8mo ago
  I was talking about small businesses like restaurants which generally used to accept credit card even before UPI. Now very few accept credit cards. Even before UPI credit cards were common accepted online. So I am not sure about that as well.
  - compounding_it 8mo ago
    Small businesses generally dont because the setup for a merchant POS is quite a bit of hassle. In fact maintaining that device also costs money. A UPI merchant on the other hand is quite easy and free from what I know. This setup with visa mastercard might change in the future (with square like devices). However there is also a security problem so fraud might increase with that. Very interesting times for visa and mastercard who have basically not innovated since their existence and yet somehow have grown so big.

kylehotchkiss 8mo ago

I was there when this started to roll this out - I remember a lot of nice pine labs payment terminals - it was really nice that I could begin to depend on my American Express card there more than trying to finagle cash (2000inr bills get you a lot of frustrated service workers). I say AmEx because they tended to work much better than my visa there.

compounding_it 8mo ago
That’s how all my non resident friends pay. They have chase bofa discover Amex etc cards that they use to pay most places. Ease of payments is the catch and credit cards bring that process down a lot. There is something psychological going on with cards that UPI and ApplePay simply don’t have. Swiping probably was fastest.
- kylehotchkiss 8mo ago
  Apple Pay did not work when I was there (2018-2021). Does it now? I'm planning my next trip and little things like Apple Pay go a long way :)
  - compounding_it 8mo ago
    Nope it doesn’t but it’s coming soon apparently. I’m assuming these POS just get a firmware update to get it to work.

shaokind 8mo ago

Anecdata here, but the last times I tried to use VISA/MasterCard in a shopping mall meant to serve people from all over the world, it just did not work. UPI was flawless, though. (And then as pointed out, anyone smaller straight up doesn’t support anything outside of UPI.)