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UPI: Anatomy of a Payment Transaction
21–30 of 137 posts
Re: UPI: Anatomy of a Payment Transaction
#22Centralized, kyced, private money transaction network. Is this something good?
way better than privately owned banks doing the same while extracting profits from users. better than todays crypto with terrible ux where its easy to lose all your money. more practical than cash (but that should still be an option).
worse than a system thats convenient and decentralized and anonymous at the same time, but we dont have one yet. maybe in 5 years when ethereum figures out native account abstraction, seamless scaling and monero level privacy.
Re: UPI: Anatomy of a Payment Transaction
#23How is this different from Alipay/WeChat Pay in China? Handling transactions of this volume is an amazing technological feat, kudos to the team! However, I don't think this mobile QR code paying system is anything novel. Alipay rose to popularity much earlier (I can't recall exact when, but it was already super popular in ~2010, and definitely ubiquitous by 2015).
UPI is more like a routing/reconciliation layer like VISA that can work across any bank/wallet, and that core is run by a non-profit government org. It doesn't take custody of the funds and doesn't centralize the information into a private corporation. The fee is also minimal and flat-rate with no profit incentive, instead of paying a percentage of the entire countries transaction volume to some private company. I would guess that adds up to a huge amount of money saved overall.
Re: UPI: Anatomy of a Payment Transaction
#2422B transactions a year mean an average of ~700 QPS for the NPCI switch. Of course the traffic is not uniform, it probably peaks at many times that number, but that still doesn't sound that bad - for comparison, a quick Google tells me Nasdaq TotalView ITCH feed peaks at 100k+ QPS at market open.
The right comparison for Nasdaq's order processing volume or messaging volume would be India's National Stock Exchange (NSE). It does more executed orders per day than nasdaq. I worked on scaling UPI a few years ago. Real-time Payments is vastly more complex as it is much more distributed - each transaction involves the two banks holding funds, two end-user apps (and their banks), and the network (npci) – for the pay…
None of them are free, most banks now charge nominally (look at NEFT and IMPS charges). UPI itself is paid off by taxpayers.
Also RTGS is the only ISO 20022 complaint payment rail (back when it wasn't globally very common) - something that needs to be appreciated more.
People need to realise what NPCI offers is vastly different from what RBI offers. In my opinion what NPCI is offering will end up negatively impacting the general population in the long run.
Re: UPI: Anatomy of a Payment Transaction
#25Earlier quoted context omitted.
How is it KYCd yet also private?
It's the intention and use case. The government want to reduce the fund leakages and reduce corruption, directly transfer the money to citizens, reduce transaction costs. Hence it works. The government does not track all the transactions. You need a police FIR, to review these transactions. In short, Indian government does not track or they don't have the scaling to track. But they can do it, if there is any criminal…
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Re: UPI: Anatomy of a Payment Transaction
#26Earlier quoted context omitted.
How is it KYCd yet also private?
It's the intention and use case. The government want to reduce the fund leakages and reduce corruption, directly transfer the money to citizens, reduce transaction costs. Hence it works. The government does not track all the transactions. You need a police FIR, to review these transactions. In short, Indian government does not track or they don't have the scaling to track. But they can do it, if there is any criminal…
> In short, Indian government does not track or they don't have the scaling to track
This is completely wrong.
Not only can the Indian govt track each these transactions, it's actually written into law via the 'anti money laundering' bill (PMLA) and the income tax act. For a very high level overview, see https://www.bankbazaar.com/tax/tax-on-upi-transactions.html
From the article
'Can the Income Tax Department Track Your UPI Transactions?
Yes. With the integration of PAN, Aadhaar, and Know Your Customer (KYC) via all banking and fintech channels, all your UPI transactions can be tracked. If you think your small-value digital transfers won't be traced, you are mistaken. UPI payments are directly linked to your bank account, and bank records can be obtained by tax officers through scrutiny or reassessment.'
Specifically, no complaint or warrants are needed to enable access to UPI transaction records.
Re: UPI: Anatomy of a Payment Transaction
#27Earlier quoted context omitted.
It's the intention and use case. The government want to reduce the fund leakages and reduce corruption, directly transfer the money to citizens, reduce transaction costs. Hence it works. The government does not track all the transactions. You need a police FIR, to review these transactions. In short, Indian government does not track or they don't have the scaling to track. But they can do it, if there is any criminal…
> In short, Indian government does not track or they don't have the scaling to track This is completely wrong. Not only can the Indian govt track each these transactions, it's actually written into law via the 'anti money laundering' bill (PMLA) and the income tax act. For a very high level overview, see https://www.bankbazaar.com/tax/tax-on-upi-transactions.html From the article 'Can the Income Tax Department Track…
Yeah globemaster99's point seems very naive.
Re: UPI: Anatomy of a Payment Transaction
#28Earlier quoted context omitted.
The right comparison for Nasdaq's order processing volume or messaging volume would be India's National Stock Exchange (NSE). It does more executed orders per day than nasdaq. I worked on scaling UPI a few years ago. Real-time Payments is vastly more complex as it is much more distributed - each transaction involves the two banks holding funds, two end-user apps (and their banks), and the network (npci) – for the pay…
None of them are free, most banks now charge nominally (look at NEFT and IMPS charges). UPI itself is paid off by taxpayers. Also RTGS is the only ISO 20022 complaint payment rail (back when it wasn't globally very common) - something that needs to be appreciated more. People need to realise what NPCI offers is vastly different from what RBI offers. In my opinion what NPCI is offering will end up negatively impacting…
Just for my curiosity, why do you think "what NPCI is offering will end up negatively impacting the general population in the long run."
Re: UPI: Anatomy of a Payment Transaction
#2922B transactions a year mean an average of ~700 QPS for the NPCI switch. Of course the traffic is not uniform, it probably peaks at many times that number, but that still doesn't sound that bad - for comparison, a quick Google tells me Nasdaq TotalView ITCH feed peaks at 100k+ QPS at market open.
A great lesson for system design job interviews - if this is a popular payment system in a country with 1.5 billion people, your theoretical system you're designing for a small company cargo culting Google interviews will not likely support millions or even tens of thousands of average TPS.
Well, they are money-moving transactions which means each person only does them a few times per day. If your system's transactions are more like showing the weather on the home screen, it's plausible you could have orders of magnitude more traffic than a payment system.
Re: UPI: Anatomy of a Payment Transaction
#30Centralized, kyced, private money transaction network. Is this something good?
That's how government money works. This is the best possible system for handling government money. If you want an alternative you could buy some bitcoin with it.