Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

A digital payments revolution in India

economist.com

Post reply on HN
Print view View original

51–60 of 179 posts

Re: A digital payments revolution in India

#51

Post by rvz »

cuteboy19 wrote: post #11
rvz wrote: post #7

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.…

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

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...

Re: A digital payments revolution in India

#52

Post by signal11 »

vivegi wrote: post #44
signal11 wrote: post #36

Earlier quoted context omitted.

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 car…

> UPI has no dispute resolution (as of now) Not true. [1] [1]: https://www.npci.org.in/what-we-do/upi/dispute-redressal-mec...

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 ” parent comment, disputes in UPI are currently a headache. And part of the reason is the narrow scope NPCI can act in.

Re: A digital payments revolution in India

#53

Post by 1024core »

colesantiago wrote: post #48
vivegi wrote: post #44

Earlier quoted context omitted.

> UPI has no dispute resolution (as of now) Not true. [1] [1]: https://www.npci.org.in/what-we-do/upi/dispute-redressal-mec...

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.

[flagged]

Re: A digital payments revolution in India

#54

Post by nish1500 »

1024core wrote: post #49
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.

> 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

I used 2.9% + 30cent for each transaction

Re: A digital payments revolution in India

#55

Post by signal11 »

colesantiago wrote: post #48
vivegi wrote: post #44

Earlier quoted context omitted.

> UPI has no dispute resolution (as of now) Not true. [1] [1]: https://www.npci.org.in/what-we-do/upi/dispute-redressal-mec...

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.

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.

Re: A digital payments revolution in India

#57

Post by vivegi »

photochemsyn wrote: post #8

[flagged]

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.

Re: A digital payments revolution in India

#58

Post by vivegi »

samarthr1 wrote: post #43
photochemsyn wrote: post #32

Earlier quoted context omitted.

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 al…

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 t…

> 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).

Re: A digital payments revolution in India

#59

Post by masfuerte »

1024core wrote: post #42
blntechie wrote: post #21

Earlier quoted context omitted.

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?

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.

But it's not spying if we don't listen to it!

Re: A digital payments revolution in India

#60

Post by cubefox »

toomuchtodo wrote: post #4

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

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.

Post reply on HN