Why peer to peer digital payment system UPI should remain free in India
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Re: Why peer to peer digital payment system UPI should remain free in India
#2absolutely.
i am a professional who deals with businesses and i have seen how UPI has immensely helped reduce dependency on cash...
i use it everyday. right now UPI is mandated to be mobile phone based, it has to keep the registered SIM card at all times, you cannot change your phone, cannot have a single account on muliple places, you dont have account portability but those are all technical issues.
Because of an actual recession, the government is finding new ways of collecting taxes, recently they put GST or a tax on paid public toilets. So, everytime you pay to use a paid toilet, you are giving 18% tax on that transaction. That is the level of "tax hounding" the government has resorted to.
i fully agree with the author here, i would even suggest, all the private players like google pay/phone pe who have their own apps built on top of UPI network should be made to pay-to-play because they are definitely earning because of cross-selling/upselling/advertising.
google/amazon wants to float a new UPI app, heck even trucaller has one so why should they not have an interest free bank deposit to pay for the infrastructure. they would continue to earn by up selling etc anyways and the network would continue to get funds to run.
Re: Why peer to peer digital payment system UPI should remain free in India
#3Good god this is a great article!
Starting from TLDR at top, it is well reasoned, well sourced and very detailed.
And I agree, UPI should remain free, precisely to allow the vibrant ecosystem and innovation formed around it. Banks nowhere are known to be nice guys, even TFA gives multiple examples when they were dicks until forced down, and its no good idea why they should get paid for UPI transactions when they are already turning out profit from it.
Re: Why peer to peer digital payment system UPI should remain free in India
#4Thanks very much! I would love to hear your comments.
I think UPI is incredible and well loved because it's free - putting a toll on something moving at this insane speed is just going to slow it down tremendously.
Re: Why peer to peer digital payment system UPI should remain free in India
#5Thanks very much! I would love to hear your comments. I think UPI is incredible and well loved because it's free - putting a toll on something moving at this insane speed is just going to slow it down tremendously.
Hey Deepak, I saw your comments about this on Twitter, and it’s good to see this article as well.
Personally I don’t think UPI will ever go to a fully-paid model, but I’d love to know what you think about the potential for a “freemium” model, eg with payment protection or improved anti fraud built in. My sense is that combating fraud/abuse costs money and currently UPI essentially relies on the customer not making mistakes, and if they do get defrauded they have to work the Indian justice system to get their money back — not easy at the best of times.
Also about this
> Banks earn 50x to 100x more than the cost of UPI/payments in just float income
A bunch of banks complained about loss of float income with RTGS & IMPS, is there any information about how they see UPI (which is built on IMPS?) affecting float? (I get that they have a lot of float income, but many Indian banks appear to be very inefficient and that float money is probably being used elsewhere already.)
Finally, internet shutdowns — today apparently a huge chunk of transactions are cash-based in India. But UPI’s clearly growing fast — and as it grows further, will the Indian government’s propensity to kill mobile data at the slightest sign of trouble affect people’s perception of UPI, by making it seems less reliable than cash? Or is there hope India will revisit internet shutdowns?
Thank you!
Re: Why peer to peer digital payment system UPI should remain free in India
#6Is UPI one of the rare times when a government organization has created an innovative technology that works for a scale of 100 Million+ users?
Re: Why peer to peer digital payment system UPI should remain free in India
#7UPI's penetration in (urban and semi-urban anyway) India is honestly incredible. I worked with/on the tech when it was very nascent in 2016 and in 2022, on visiting India after a long time I was stunned to see _everyone_ has a little PayTM QR code card. Vegetable vendors, taxi drivers, roadside hawkers, small business owners. It's brilliant because the system is banking the traditionally unbanked, and generating tremendous amounts of data that can hopefully be put to good use by economists, honestly unlike any other system in the world. Even MPesa in Africa has stupidly high withdrawal and transaction fees, which UPI doesn't need at all.
Re: Why peer to peer digital payment system UPI should remain free in India
#8Is UPI one of the rare times when a government organization has created an innovative technology that works for a scale of 100 Million+ users?
That too without a middleman to skim off the top.
Re: Why peer to peer digital payment system UPI should remain free in India
#9For anyone looking to get a better handle on the numbers, INR 10 cr is approximately GBP 1 million.
Re: Why peer to peer digital payment system UPI should remain free in India
#10For anyone looking to get a better handle on the numbers, INR 10 cr is approximately GBP 1 million.
the blog says: 10 lakh crore rupees per month not INR 10 cr
10 lakh crore rupees per month = INR 10,000,000,000,000
which at the current rate of ~INR 79 to $1 comes to
$126,582,278,481.00 per month
as in $4,219,409,282.00 (over $4 Billion) per day