[HN Gopher] A digital payments revolution in India
___________________________________________________________________
A digital payments revolution in India
Author : saikatsg
Score : 137 points
Date : 2023-05-20 13:58 UTC (9 hours ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| nish1500 wrote:
| 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.
| Kenji wrote:
| [dead]
| cubefox wrote:
| > 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.
|
| Credit card companies charge even more than banks.
| umeshunni wrote:
| Most of the interchange goes to banks.
| louwrentius wrote:
| 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 wrote:
| > 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 wrote:
| As far as I know only the Merchant and your account is
| known to iDeal, not what you buy.
| signal11 wrote:
| UPI has no dispute resolution (as of now). So if you pay with
| UPI to someone and have a dispute, good luck. You have to
| approach the Indian courts to get your money back, which, given
| the Indian justice system, is... difficult.
|
| By contrast, dispute resolution with cards is much easier.
| Also, I don't recognise this 3% figure -- not in all
| geographies.
|
| Eg Europe under PSD2 has 0.3% for credit cards, and 0.2% for
| debit cards. In Canada, Visa and MC recently agreed to a 1%
| cap.
|
| That said, I'd be very interested in seeing where the
| conversations around dispute resolution in UPI leads. Context:
| Indian banks have already begun to complain about UPI being
| free, and the Indian authorities had to quickly walk back a
| consultation around potential merchant-side charges to UPI.
|
| I guess this tension between business, customers, and digital
| intermediaries is what makes payments an interesting space.
| [deleted]
| vivegi wrote:
| > UPI has no dispute resolution (as of now)
|
| Not true. [1]
|
| [1]: https://www.npci.org.in/what-we-do/upi/dispute-
| redressal-mec...
| colesantiago wrote:
| Glad to see it.
|
| It makes me sad that there are so many misconceptions about
| UPI that people are willing to resort to falsehoods (such
| as CBDCs and privacy) and it shows that most criticisms are
| from people that haven't used it in the real world.
| 1024core wrote:
| [flagged]
| signal11 wrote:
| The UK's Faster Payments system predates UPI. Free, near-
| instant payments round the clock. IMPS, the tech that
| powers UPI, came around 2 years later.
|
| But UPI as a layer on top of IMPS is great, especially
| the idea of providing an easy you@bank identifier. By
| contrast Faster Payments is like 102030-12345678. And
| being designed post iPhone was actually a blessing
| because it allowed UPI to have a mobile-first deployment
| strategy.
|
| But UPI also makes a virtue out of necessity: the reality
| that cards and a protected e-payment mechanism are
| difficult to organise, especially for India's less-well
| off.
|
| This then turns into nationalistic chest thumping about
| "jealous foreigners", while completely ignoring real
| issues around customer protection and scenarios that UPI
| doesn't enable.
|
| To be clear: I wish UPI well. I also want to see less
| opportunities for scammers in UPI and for people to be
| able to use UPI with confidence knowing they will be
| _easily_ refunded if things go wrong.
|
| It's honestly tiresome to have reasoned conversations
| with nationalistic chest thumpers.
| 1024core wrote:
| > It's honestly tiresome to have reasoned conversations
| with nationalistic chest thumpers.
|
| You are referring to yourself here, aren't you?
| signal11 wrote:
| There are misconceptions about UPI all right, but a lot
| of it is from UPI proponents who have no idea what
| dispute resolution means.
|
| Order a bed and pay via UPI, say. Get a chair instead.
| These type of commercial disputes are difficult for a
| payments service to adjudicate.
|
| When you use the term "falsehoods", keep in mind that a
| lot of these criticisms come from people who've worked in
| payments for decades, and know a fair bit about customer
| protection.
|
| If we're going to talk about falsehoods, we should also
| talk about the falsehoods UPI proponents share about card
| payments.
|
| And to be clear, my focus is customer protection. I don't
| give a flying fish about the mechanism.
| signal11 wrote:
| The process you link to is Indian bureaucracy at its
| finest. It also focuses on disputes surrounding UPI
| payments, ie "I paid via UPI and the money didn't arrive".
| Look at the categories of disputes on that page. The
| "fraudulent transaction" is extremely narrowly scoped to
| fraudulent use of your UPI account.
|
| But by "dispute resolution", most people in payments mean
| commercial disputes -- "I paid for a chicken, you sent me
| an egg" type disputes. Or didn't send anything at all.
|
| That's hard to deal with in UPI, last I checked. But I
| could be wrong! But then -- why do all these UPI disputes
| and scams keep cropping up in newspapers and social media?
|
| Another scenario is dealing with a fraudulent withdrawal
| (no matter how it happens) by getting a refund with one
| phone call. The driver for this is that under most
| consumer-friendly legal systems, the customer gets a near-
| immediate refund for any unauthorised withdrawal. UPI =>
| no. It's damned difficult.
|
| To be clear, this isn't a problem with UPI as a piece of
| code, UPI moves money from A to B cheaply and quickly.
| Great. But the governance that is wrapped around it has
| serious consumer protection problems.
|
| The problems (eg dispute resolution) will be an interesting
| one to resolve. Despite the bold "not true <link>" parent
| comment, disputes in UPI are currently a headache. And part
| of the reason is the narrow scope NPCI can act in.
| vivegi wrote:
| I use UPI daily.
|
| 1. In scenarios where UPI is replacing a cash transaction
| e.g., purchasing fruits from a fruit vendor on the street
| (just did it a few hours ago), the transaction is
| immediate. Disputes are settled exactly as how it would
| be done with a cash transaction i.e., discuss and settle
| with the vendor in situ.
|
| India had a separate settlement mechanism called Cash-On-
| Delivery that was needed for companies like
| Amazon/FlipKart etc., to penetrate the ecommerce space
| before UPI came into being. Even Amazon does returns and
| refunds through their online/app-based customer service
| process.
|
| 2. In scenarios where UPI is replacing a credit card
| e.g., I order food through a food delivery app and an
| item is missing. The food delivery app provides a
| customer service option where they are able to resolve
| the issue (they could a. deliver the missing item at no
| charge, b. give me a cash coupon for the inconvenience
| that I can use on their app, c. refuse to resolve the
| issue). I haven't had a scenario where the service
| provider has refused to resolve the issue.
|
| 3. As far as fraud is concerned, a couple of months ago
| the local police visited our apartment complex for a
| brief meeting to educate people on frauds and safety.
| They focused on digital crimes and told us about the
| national helpline for cybercrime. [1] Residents can dial
| 1930 to reach the national cybercrime helpline to report
| crimes, including online frauds -- this also includes the
| QR code scams that you hear about in the media. They
| register the complaint and guide you with the process for
| recovering lost funds. I haven't done this myself, but
| what the officer explained is that based on the
| transaction details, the national cybercrime control
| center coordinates with the participating banks on both
| sides of the transaction to immediately freeze funds. You
| can also take the complaint number to the nearest police
| station and get an FIR (First Information Report) filed
| to get the fraudsters criminally prosecuted.
|
| 4. In scenarios involving a buyer-seller dispute, there
| is the consumer protection laws where the consumer can
| directly file suit against the provider in a consumer
| court. These are special courts (separate from the civil
| and criminal courts) and are very effective in protecting
| consumer rights. This works for all types of consumer
| disputes about service/product issues.
|
| This would be the last resort for protecting consumer
| rights even in cases where a credit card company declines
| to handle a consumer's complaint on technicalities and is
| not just for UPI. These courts are at the district level
| in all states. [2]
|
| People in the west and other developed countries have a
| lot more of their digital transactions occuring on
| credit/debit cards and are comparing that with UPI. While
| what UPI is doing overlaps with a lot of that, it also is
| more than that in enabling micropayments and p2p
| payments. So, that is of value for the average Indian
| resident.
|
| [1]: https://cybercrime.gov.in/Webform/Helpline.aspx
|
| [2]: http://ncdrc.nic.in/districtlist.html
| signal11 wrote:
| I don't dispute most of what you say. I'll only say that
| you're a little optimistic re (3) and (4).
|
| Speak to regular (not well connected) people who've been
| through the justice system. It's not pretty.
|
| But then maybe you're lucky enough to live in a state
| with super responsive police and courts. After all, a lot
| of this stuff is a state subject and can vary by state.
|
| But the stories of hellish experiences seem to come from
| all around the country.
| vivegi wrote:
| I agree with your statement above. UPI is looking at also
| getting credit card accounts linked to the NPCI/UPI
| network in the future. NPCI itself is trying to push
| RuPay as an alternative to Visa/Mastercard for domestic
| card payments.
|
| So, a subtle difference from a payment stack perspective
| is that the consumer protection offered by credit cards
| is not necessarily a payment stack functionality but a
| feature of the credit card (just as credit and loyalty
| points etc., are a function of the credit card).
|
| It is just a slighly different design goal and honestly
| most users of UPI are okay with it because they favor the
| cash-replacement offered by UPI.
|
| I will say this though -- the ease of use in UPI is so
| smooth that if users fail to double check the QR code
| they have scanned (actually the UPI virtual address) with
| the vendor and confirm that it is indeed their account (I
| do it every time), there is a possibility of hackers
| diverting the funds at the point-of-sale through the use
| of fake QR codes. This risk is similar to skimming
| devices installed on PoS machines/ATM machines to steal
| credit card data.
| hocuspocus wrote:
| The EEA cap on fees only applies to _interchange_ in 4-party
| schemes, i.e. the part that goes back to the issuing bank.
| PSPs typically charge between 0.7 and 1.5%. But yes, it 's
| possible to do much better than countries like the US. For
| starters because card-present fraud is virtually nonexistent,
| and online fraud is drastically lower thanks to SCA.
|
| That said, you're right, there's a fundamental difference
| between moving funds in an immutable way (whose marginal
| price tends to zero) and a payment system.
| toomuchtodo wrote:
| Which means bifurcation will occur. Payments where you have
| high trust and confidence you won't need a dispute will use
| UPI or similar instant payment rails. Transactions where you
| are not confident or are concerned a dispute is going to be
| required, you'll pay the transaction fee to use CC rails.
| Credit cards will become "insured payment" rails for lower
| trust transactions.
|
| I'd never dispute a payment to my mortgage servicer or
| electrical utility, but I absolutely might for a rando
| Facebook ad sale.
| signal11 wrote:
| > I'd never dispute a payment to my mortgage servicer or
| electrical utility,
|
| Er. "Never" is a strong word and it depends on scope. There
| have been numerous cases of overcharging. Sure, I might not
| dispute the payment itself, but the amount? Frequency?
| These get disputed all the time.
|
| Many jurisdictions have good consumer protections for this,
| though, so overcharging will cause penalties-- that does
| provide incentives for companies to do the right thing.
| 1024core wrote:
| > UPI has no dispute resolution (as of now).
|
| And cash does??
| signal11 wrote:
| If UPI competed with cash, that'd be sort of fine.
|
| The problem is that UPI enthusiasts think it's a perfect
| replacement for cards. It's not.
|
| Even with cash, because you need physical presence, you can
| inspect the goods. Under many UPI scenarios, that doesn't
| happen.
|
| So a "and cash does?" comment sounds like a clever zinger,
| but in reality cash and UPI have different threat models.
|
| Equally, UPI _is_ a useful alternative to cash and cards.
| The real world isn't black and white. It's not like UPI has
| zero value. But it's not like cash and cards has zero value
| either.
|
| Finally, one scenario where cash > UPI is: anytime there's
| an internet shutdown. Of which India has an insane number.
| colesantiago wrote:
| You can use UPI offline:
|
| https://www.gadgetsnow.com/how-to/how-to-pay-online-
| using-up...
|
| This is what I mean with so many misconceptions,
| falsehoods and just outright conspiracy theories, from
| people who have probably never used UPI.
| signal11 wrote:
| > you can use UPI offline
|
| Yes, UPI Lite (local offline wallet) has a transaction
| limit of INR 200. Yes, 200. With a limit of 4000 per day
| and the Lite wallet can hold 2000 at any one time.
|
| Good luck doing anything serious with that. Also, good
| luck reloading the wallet when the internet is blocked.
|
| Note: the context of this thread was a UPI vs Cash
| comparison. Cash is king when the internet isn't
| available. UPI Lite notwithstanding.
|
| And for those unfamiliar with Indian context: internet
| shutdowns happen at the drop of an hat, at a city or
| sometimes state/part of a state level. For days or
| longer. In one notorious instance, for multiple months.
| There's little oversight, any local authority can make it
| happen, with little recourse by the public.
|
| They are a massive failure of local governance in India.
| And getting defensive about it won't help _you_ in the
| long run, if you live in India. Sooner or later, you'll
| be affected too.
| alephnerd wrote:
| > They are a massive failure of local governance in
| India. And getting defensive about it won't help you in
| the long run, if you live in India. Sooner or later,
| you'll be affected too.
|
| Yep. Welfare Schemes are distributed via UPI, and
| internet shutdowns often affect regions where there are a
| number of residents who are eligible for welfare schemes
| like MGNREGA, PMSBY, etc.
|
| Look at Manipur for example or portions of UP during law
| and order flairups.
|
| That said, in my ancestral village it is being used as a
| cash alternative. Almost no one there is eligible for a
| credit card, and "payment disputes" are resolved with
| lathis or bandhs.
| solatic wrote:
| 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.
| nish1500 wrote:
| Salaries for what? Marketing? Obscene bonuses? Downtown
| office buildings? It is a manufactured need.
|
| I am simplifying things but if we had a public owned payments
| system that wasn't a profit centre the costs would be far
| less.
|
| Even within the developed world the costs are very different
| between Europe and the US. Your fees are paying for someone's
| hefty bonus and lobbying expenses.
|
| Again, it has been proven. UPI works.
| wildrhythms wrote:
| Why do you believe the investments made by the middlemen
| processors and banks are more worthy than the investments
| made by businesses who the consumer is directly patronizing?
| sunshinerag wrote:
| wow Capitalism? Where?
| 1024core wrote:
| > When this $100 has exchanged hands 50 times only $15 remains.
|
| Just to nitpick: 0.97^50 is 0.21806. So only $21.81 would
| remain and the banks would have $78.19
| nish1500 wrote:
| I used 2.9% + 30cent for each transaction
| thatfrenchguy wrote:
| Only in America are fees that high :)
| [deleted]
| somerandomqaguy wrote:
| Plusses and minuses to each system. You don't need to pay the
| cost of transporting the cash to and from a bank (worst case is
| armored car transport), and electronic transfers have lower
| accounting overheads (no need to manually count). And modern
| credit cards have pretty sophisticated fraud/card theft
| detection nowadays.
| rvz wrote:
| 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-...
|
| [1] https://indianexpress.com/article/explained/what-is-e-
| rupi-d...
| cuteboy19 wrote:
| 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 wrote:
| 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...
|
| [1] https://reclaimthenet.org/digital-euro-spending-saving-
| limit...
|
| [2] https://www.newsweek.com/banks-have-begun-freezing-
| accounts-...
|
| [3] https://www.pymnts.com/cbdc/2022/nigeria-cuts-atm-cash-
| withd...
| photochemsyn wrote:
| India seems desperate to turn itself into an authoritarian mass
| surveillance panopticon that is little different from the Chinese
| system, and the transition to a cashless economy is in line with
| that goal. This push dates back to ~2015.
|
| > "India's parliament on Wednesday passed legislation that gives
| federal agencies access to the world's biggest biometric database
| in the interests of national security, raising fears the privacy
| of a billion people could be compromised."
|
| https://www.reuters.com/article/uk-india-biometrics-idAFKCN0...
|
| > "With this comes the spectre of bank surveillance, where every
| transaction you ever partake in is authorised and recorded by a
| privately run commercial bank, giving it a transaction-by-
| transaction history of your entire commercial life. If such a
| bank does not like an enterprise - such as Wikileaks - it can
| just freeze it out."
|
| https://www.theguardian.com/sustainable-business/2015/sep/30...
| vivegi wrote:
| The digital payments infrastructure in India has done more to
| bring more people into the banking system than what was
| possible earlier.
|
| It is pervasive, ubiquitous and very user friendly.
|
| This is all thanks to the mobile data revolution ushered in by
| the telecoms companies in India over the last decade and a
| half.
|
| Yes, data privacy is a larger issue that needs to be addressed
| in India, but that is no different than other digital payment
| methods like credit/debit cards.
|
| One less mentioned point is that this payments revolution has
| done a lot to cut the country's carbon-footprint in the form of
| driving to the ATM or bank to get cash for routine
| transactions. Also, UPI is extremely consumer-friendly. If you
| withdrew cash from another bank's ATM, you may be charged fees
| whereas UPI is free for transactions up to INR 100,000 (approx
| $1200 USD)/day. This covers almost all day-to-day transaction
| needs for people.
|
| I can choose a third-party fintech company's UPI app (eg:
| PayTM, PhonePe etc.,) or my bank's UPI app. So, it is
| incredibly flexible.
| elijaht wrote:
| How many hours a week was the average person spending driving
| to get cash?
| rippercushions wrote:
| During the rupee demonetization a few years back, getting
| cash required queueing up for hours. About the only silver
| lining of that whole debacle was the boost it gave to
| digital payments, because cash was so broken.
| zeronine wrote:
| It's like 1984 pERwKhkqvqM
| colesantiago wrote:
| Please stop pushing these baseless conspiracies.
|
| The Indian government has no reason to track 500 million people
| in India, it would be more data than they would be able to
| handle.
|
| Also most people don't care enough about this, yet the RBI is
| thinking about adding anonymity to UPI.
|
| "The RBI may also test anonymity, security and privacy related
| to digital currency, It is possible to get a legal provision to
| ensure anonymity."
|
| https://timesofindia.indiatimes.com/gadgets-news/heres-what-...
| new2yc wrote:
| > Indian (or any) government has no reason to track 500
| million people
|
| LOL, don't tell me you are from a technical background
| colesantiago wrote:
| ???
|
| This isn't an argument.
| Mistletoe wrote:
| I really don't think there is anything like "too much data to
| handle" in the year 2023. The denizens of /r/datahoarder and
| /r/homelab probably have enough to do it, much less a
| government organization.
| thfuran wrote:
| Not that I particularly agree with the GP, but storing data
| isn't the hard part.
| ta7789 wrote:
| [flagged]
| FpUser wrote:
| >"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 wrote:
| 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 wrote:
| 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?
| photochemsyn wrote:
| India outlawed the usage of any bill larger than the
| equivalent of a $US 5 (500-rupee and up) in 2016, which was
| intended to force people into the digital payments system.
| This is much more coercive than the Euro-US approach. For an
| overview and pro/con arguments in the global government-led
| war on cash:
|
| https://www.investopedia.com/articles/investing/021816/why-g.
| ..
|
| It's also an attempt to collect a percentage of all
| transactions, which will be funneled to the usual suspects,
| here's what led to this:
|
| > "NEW YORK, September 19, 2012 -- The Bill & Melinda Gates
| Foundation, Citi, Ford Foundation, Omidyar Network, U.N.
| Capital Development Fund (UNCDF), U. S. Agency for
| International Development (USAID), and Visa Inc. announced
| today the launch of the Better Than Cash Alliance. The new
| initiative will call on governments, the development
| community and the private sector to adopt the use of
| electronic payments..."
| SanjayMehta wrote:
| Wrong. An older series of currency notes were replaced by
| newer notes. Nothing was outlawed.
| samarthr1 wrote:
| Please do remember that the 500 and 1000 rupee notes were
| promptly replaced with a new 500 and 2000 rupee note
| series.
|
| Moreover, it was not made illegal, rather it was no longer
| considered legal tender. A far cry from making it illegal.
|
| There are on the other hand limits on the size of cash only
| transactions without a PAN Card (tax documentation)
|
| Recently, the reserve bank has announced that it is going
| to withdraw the 2000 rupee note. That means that it will no
| longer print or issue via banks 2000 rupee notes.
|
| They will still remain legal tender.
| vivegi wrote:
| > They will still remain legal tender.
|
| Until Sept 30th 2023. An individual may exchange up to 10
| notes (INR 20,000 per day) for cash between now and Sept
| 30th or deposit it into their account (no limit -- but be
| prepared to answer the taxman if there are enquiries next
| year on your tax return seeking the source of funds for
| the deposit).
| harrymit907 wrote:
| How is "illegal" and "no longer considered legal tender"
| different?
|
| Regardless of the intentions, I don't see how banning
| people from using currency notes that they legally owned
| is not dictatorial. Why is using cash deemed guilty
| before even having any evidence.
| nine_k wrote:
| Illegal: you get arrested for possession.
|
| Not legal tender: you cannot pay taxes with it, and
| generally cannot use in monetary transactions.
| rvba wrote:
| Indian rupees arent even a convertible currency...
| AndrewKemendo wrote:
| It was then, and now that we know how easily it is to abuse
| anyone following that lead must tacitly accept that it will
| be abused similarly unless explicitly implemented not to -
| which isn't the case here.
|
| It's just another extension of "we have to do this cause
| everyone else is and if we don't we'll be more vulnerable"
| which is from what I can tell the root of all evil.
| 1024core wrote:
| And every non-citizen visitor to the US gets fingerprinted
| and photographed.
|
| How's that for "land of the free", eh?
|
| And while we're at it: every phone call in the US gets
| recorded and stored. That's what that big datacenter in Utah
| is for.
| masfuerte wrote:
| But it's not spying if we don't listen to it!
| nine_k wrote:
| It's the land of the free, not the land of the
| unidentified! Even so, the extent to which living in the US
| is possible without various documents, and the lack of a
| unified national ID, makes the US a much milder environment
| in this regard than most of Europe. Yes, even healthcare:
| if you show some employment or other income, they will
| agree to ignore the absence of an SSN, for instance.
| FlyingSnake wrote:
| As a Berliner: I would be fine to share my data and see ads
| if I get UPI in exchange
| SanjayMehta wrote:
| There are no ads. There aren't even transaction fees, for
| now.
| stavros wrote:
| It's authoritarian here as well, who said the opposite?
| Digital payments are a privacy nightmare.
| y-c-o-m-b wrote:
| > but suddenly when the Asian people do it
|
| As a "brown person", I resent this attempt at weaponizing
| racism just for the benefit of making your argument. Not only
| does it make your argument look petty and weak, but it
| actually damages the real efforts to battle true racism in
| the US. Please stop.
| aleph_minus_one wrote:
| > 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).
| alephnerd wrote:
| In my ancestral village, before cashless payments the nearest
| bank was 5 miles away in the district/county headquarters. If
| you needed to take out cash or deposit a paycheck, you'd need
| to ride a bike or take a bus or walk over potholed roads to get
| to that bank which was staffed with lazy employees who'd take
| chai+nashta breaks all the time.
|
| With the proliferation of cashless payment options, it's much
| easier now to deposit a paycheck or buy groceries in these
| small towns and villages.
| kylehotchkiss wrote:
| 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 wrote:
| https://travel.economictimes.indiatimes.com/news/technology/...
|
| (Foreign tourists & travellers in India can now make payments
| using UPI)
| ledgerdev wrote:
| Any possibility for some regional/local/state payment system in
| the US that's not a 3% tax on every purchase?
| cubefox wrote:
| Someone else posted this:
| 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 wrote:
| 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 wrote:
| [dead]
| lucasfcosta wrote:
| 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 wrote:
| in Spain there's Bizum
| Carioca wrote:
| Nitpick: Pix is free between people. Companies pay ~1% of the
| transaction
| rippercushions wrote:
| Nope, on average 0.22%.
|
| https://www.reuters.com/article/brazil-cenbank-pix-
| idUSL2N2V...
| stefan_ wrote:
| That is crazy high, cash back credit card levels
| devnull3 wrote:
| 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 wrote:
| In such a scenario only cash works.
| ta7789 wrote:
| 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.
| SanjayMehta wrote:
| The fact that it's public infrastructure and has no transaction
| fees is the source of much of the negative press.
|
| Both Mastercard and Visa went complaining to the US govt about
| UPI and RuPay because they foresee their duopoly ending.
| ta7789 wrote:
| Correct. Public infrastructure can (but not usually is) run
| at a loss for the welfare of the citizens. That's the whole
| point of public infrastructure. MasterCard and Visa have been
| complaining for a _long_ time about this issue as it
| undercuts their profitability.
| sifar wrote:
| >> The plain idea of UPI is that it is publicly funded digital
| infrastructure
|
| UPI is developed by NPCI which is a consortium of Indian banks
| (public and private), supported by RBI[0]. It is a not-for
| profit, but _not_ publicly funded.
|
| The fees are lower right now since they want to proliferate the
| use and get a monopoly over Visa/Mastercard. Once done, expect
| them to be at par. They just added some fees this march [1].
|
| The distrust is not conspiracy theories but common sense when
| you observe how other entities have behaved previously.
|
| [0] www.npci.org.in [1]
| https://www.thehindubusinessline.com/blexplainer/interchange...
| alephnerd wrote:
| > It is a not-for profit, but not publicly funded.
|
| That's a bit disingenuous.
|
| 51-55% of NPCI's ownership is the RBI and PSU Banks (operated
| by Ministry of Finance) [0], so in reality it's a public
| private partnership between the Ministry of Finance and
| Private Sector banks.
|
| A good comparison to the NPCI would probably be the Federal
| Reserve system in the US, but NPCI is a bit more autarkic.
|
| [0] - https://www.npci.org.in/PDF/npci/corporate-
| governance/shareh...
| theWreckluse wrote:
| Can you please provide references/sources for the last
| statement.
| padiyar83 wrote:
| 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 wrote:
| 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.
| miohtama wrote:
| The US has a tradition in messing with banking, but it's
| not long. While sanctions have existed forever, weaponzing
| the banking system did not start until the last decade or
| two, when more power was given to FATF, and other non-
| elected international bodies led by the US.
| realityking wrote:
| > For those who don't know India has been on the receiving
| end of US sanctions for a variety of reasons.
|
| According to wikipedia[0] there's only ever been two
| sanctions against India by the US. A short lived one from
| 98-99 because of a nuclear ban and a much longer one from
| 92-2011 related to the space program/missile development.
|
| A quick search didn't turn up any current US sanctions
| either. Were there more sanctions or are you referring to
| these two?
| alephnerd wrote:
| There were recent (2019-2022) conversations about
| sanctions against India for buying S-400 missile
| launchpads [0]
|
| This was dropped after a last minute amendment of CAASTA
| [1].
|
| Though, if we're actually being honest, there was no real
| chance of sanctions actually being placed - it was just a
| negotiating ploy, and Indian Weapons manufacturers are
| increasingly working with American companies like GE and
| General Dynamics for IP transfers, though they lag behind
| Israel, France, and Russia in that market (FCPA's ability
| to pierce the corporate veil and an imo rightful aversion
| to IP transfers to generic competitors plays a big role
| in America's lag in the Indian defense market).
|
| [0] - https://www.thehindu.com/news/international/us-
| discourages-i...
|
| [1] - https://www.outlookindia.com/national/us-house-
| votes-for-caa...
| ta_vf7xjd34cc wrote:
| > A quick search didn't turn up any current US sanctions
| either.
|
| The US and Indian governments have had bad relations for
| a long time. The US has the habit of weaponizing anything
| and everything. While not exactly sanctions, people don't
| forget things like PL480[1] that easily:
|
| > Many of us still have hurtful memories of the mid-'60s
| when, after two successive years of savage drought, India
| desperately needed American wheat under the US Public Law
| 480 on rupee payment -- and at relatively low prices
| because the country had no foreign exchange to buy food
| in the world market. Indira Gandhi had just become prime
| minister and chose to go to Washington on an official
| visit. Lyndon Johnson gave her a gushing welcome and
| responded to the food problem confronting her effusively,
| promising as many as 10 million tons of PL480 wheat.
| However, at an early stage the transaction turned sour.
|
| > Infuriated by India's criticism of American bombings of
| Hanoi and Haiphong in the course of the Vietnam War, the
| irascible Texan put food shipments on such a tight leash
| that India literally lived from ship to mouth. With every
| morsel we swallowed a little humiliation. When told that
| the Indians were saying exactly the same thing as the UN
| Secretary-General and the Pope were, Johnson had
| retorted: "The Pope and the Secretary-General do not need
| our wheat."
|
| [1] Swallowing the humiliation
| (http://archive.indianexpress.com/news/swallowing-the-
| humilia...)
| braindead_in wrote:
| 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 wrote:
| sounds like the exact opposite of crypto
| alephnerd wrote:
| 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
| illegalmemory wrote:
| 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.
| cvjcvjcvj wrote:
| There are no fee at all using Brazil's pix.
| saikatsg wrote:
| https://archive.is/I3eAI
| colesantiago wrote:
| 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 wrote:
| 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 wrote:
| Less control, if anything. Remember how credit card companies
| blocked WikiLeaks and Pornhub?
| WinstonSmith84 wrote:
| 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 wrote:
| Is it really centralized?
| pokepim wrote:
| [dead]
| toomuchtodo wrote:
| India: https://en.wikipedia.org/wiki/Unified_Payments_Interface
|
| Brazil: https://en.wikipedia.org/wiki/Pix_(payment_system)
|
| US: https://en.wikipedia.org/wiki/FedNow
| cubefox wrote:
| Germany: 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 wrote:
| 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-
| ear...
|
| https://www.federalreserve.gov/SECRS/2019/December/20191227/.
| ..
| cubefox wrote:
| > 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 wrote:
| 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]
| rnjailamba wrote:
| Singapore: FAST - https://www.abs.org.sg/consumer-banking/fast
|
| Thailand: PromptPay -
| https://www.bangkokbank.com/en/Personal/Digital-Banking/Prom...
|
| Australia: NPP - https://www.rba.gov.au/payments-and-
| infrastructure/new-payme...
|
| Hong Kong: FPS - https://www.hkma.gov.hk/eng/smart-
| consumers/faster-payment-s...
|
| Philippines: InstaPay - https://www.instapayph.com/
|
| Mexico: CoDI - https://www.codi.org.mx/
|
| Indonesia: BI-FAST - https://www.bi.go.id/en/publikasi/ruang-
| media/news-release/P...
| toomuchtodo wrote:
| 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.
| martyvis wrote:
| 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.
| abdullahkhalids wrote:
| Also, Pakistan launched its own last year. Unfortunately, no
| wiki entry.
|
| https://www.sbp.org.pk/dfs/Raast.html
| SanjayMehta wrote:
| 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.
| mkrishnan wrote:
| [flagged]
| yutijke wrote:
| You have all these issues with cash added along with additional
| inconvenience of handling change, counting and making sure to
| keep enough of it. Most Cash on delivery options also let you
| pay via card or UPI on spot.
|
| Almost every small shop vendor I know accepts UPI today without
| complaint.
| crossroadsguy wrote:
| 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 wrote:
| 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.
| cubefox wrote:
| A credit card costs more in the long run, otherwise credit
| card companies wouldn't be profitable.
| samarthr1 wrote:
| 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 wrote:
| 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.
| new2yc wrote:
| [flagged]
| perryizgr8 wrote:
| > have started to put transxn fees on UPI transactions
|
| Huh? I don't think so.
| new2yc wrote:
| There you go:
| [livemint](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-pla...).
| twoclicksnorth wrote:
| > 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.
| new2yc wrote:
| > Running Payment infrastructure have a cost for banks.
| somebody has to pay for it though taxes or fees.
|
| Then don't hail UPI as a universal payments alternate, its
| just another interface; in long lines of PayPal, Stripe, etc.
| and still behind.
|
| > RBI is a statutory institution that is answerable to
| Elected Govt what are you expecting?
|
| It has (in paper) authority, independence, and accountability
| to 'manage all banks', set policy/interest rates, and
| maintain financial stability across all nations; practically
| butchered by the FC. I expect that they don't. Answerable?
| More like a puppet. Hypocrisy: Miss out a few EMIs on your
| home/car loan and see what happens. Big names (Modi, Mallya,
| etc.) have dues of thousands of crores, what's up with that?
| Just leave India and you are free?
|
| > Supreme court regularly oversteps its limits and plays govt
|
| SC can't (and don't) oversteps its limits -- it does what it
| has power to do so and it has finite written specifications
| on what it can and cannot do (the constitution). SC can't
| play govt. It keeps a check on the govt. Who keeps check on
| the govt. then? Media? Public? Freedom of speech? Why did the
| Law da minister (Kiren Rijiju) gets removed by the upper
| management? The biggest disadvantage of a highly majority won
| govt. (& weak opposition) made them fascists.
|
| > This wouldn't affect poor at all.
|
| Absolutely, because poor don't use UPI at all. To middle-
| class, it will. example: street vendor (food/veggies/general
| store): a monthly customer will always go above 2k (1% of 2k
| is 20 INR - straight to govt. which was previously zero). How
| would you track 69 transactions of <2k each bypassing your
| taxes?
|
| > Cryptocurrencies are a grift and Govt is right to ban it.
|
| Thanks for showing your non-technical background and
| illiteracy toward cryptocurrencies. And, 'grift' is not the
| word you are looking for.
|
| > gov has done a good job as far as fiscal health and
| Currency stability
|
| Good fiscal health? Just look at numbers of fiscal deficits,
| increasing debts, declining revenue collections, etc.
| Inflation, taxes, and interest rates on end-users are on all
| time high. RBI saying good fiscal health, okay. FDI, which
| current regime opposed back in UPA govt., has become a better
| source of income for current government. CMs can be seen
| begging to foreign investors every now and then. Import duty
| on electronics from China/Taiwan/Korea/Japan is all time
| high, and so is their usage (costing only public). This 40%
| import duty backfiring progress at least a decade, Apple just
| now has one store in entire India. EVs (Tesla) refused to
| come to India, till now. Don't count progress that could have
| been years ago. Agriculture sector has reduced to <20% from
| ~60% in 15 years. Black money? Better luck after
| reincarnation. Now, its time to sell every fking govt. owned
| institutions, from Navratna-like companies, to telecom
| companies. And, so are ports/railways/roads, costing end-user
| more toll-taxes just for usage (Pvt. companies will get more
| revenue than they invested in, from public). Ideas of bullet
| trains? Comes down to a few Vande-Bharats; most of railways
| crying. Unnecessary expenses, ridiculous taxes, absurd
| economic policy, etc. The govt. is carried by religious
| majority and will continue to do so.
|
| Currency stability? Refers to the ability of a currency to
| maintain its value or exchange rate over time. Compared to US
| (20 years), its down 49% and currently along sides of all
| time highs. Don't argue me on whataboutism here. For rapidly
| developing countries (e.g. India), it should be negative
| ideally.
|
| You caught me on a good mood this weekend. Constructive
| criticisms. No violence.
| cppenjoyer wrote:
| https://www.thehindubusinessline.com/blexplainer/interchang
| e...
|
| > Currently, MDR for bank-to-bank UPI transactions is zero.
| Introduction of MDRs on all UPI merchant (P2M) transactions
| seems unlikely at the moment as the government has
| maintained that UPI is a 'public good' and that it does not
| plan to introduce charges on UPI transactions. However,
| loading of wallets for UPI transactions could cost more if
| wallet issuers decide to pass on the 15 bps interchange
| required to be paid to remitter banks for loads of over
| [?]2,000.
|
| Didn't look too much into it, but I think it means that
| these charges are only applicable on PPI wallets.
| ft-kenya-claims wrote:
| The article repeats a claim discussed by
| 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."
| alephnerd wrote:
| An anecdote I posted above specifically about the positive
| impact digital payments has had on poverty eradication:
|
| In my ancestral village, before cashless payments the nearest
| bank was 5 miles away in the district/county headquarters. If
| you needed to take out cash or deposit a paycheck, you'd need
| to ride a bike or take a bus or walk over potholed roads to get
| to that bank which was staffed with lazy employees who'd take
| chai+nashta breaks all the time. With the proliferation of
| cashless payment options, it's much easier now to deposit a
| paycheck or buy groceries in these small towns and villages.
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