A digital payments revolution in India

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.

Re: A digital payments revolution in India

#7

Post by rvz » Sat, May 20, 2023, 2:42 PM UTC

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...

Re: A digital payments revolution in India

#8

Post by photochemsyn » Sat, May 20, 2023, 2:43 PM UTC

[flagged]

Re: A digital payments revolution in India

#9

Post by louwrentius » Sat, May 20, 2023, 2:46 PM UTC

nish1500 wrote: post #6

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.

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.

Re: A digital payments revolution in India

#10

Post by solatic » Sat, May 20, 2023, 2:49 PM UTC

nish1500 wrote: post #6

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.

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.