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UPI: Anatomy of a Payment Transaction

timeseriesofindia.com

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Re: UPI: Anatomy of a Payment Transaction

#51

Post by nafey »

sometimes_all wrote: post #49
dominotw wrote: post #40

Earlier quoted context omitted.

it worked because india never had credit card payments( at scale ) . they went straight from cash to digital payments.

What does this have to do with credit cards? India always had credit cards at a scale comparable to most countries, and they always were a regularly-used of payment for medium-sized "white" transactions; they just weren't that useful for day-to-day transactions in terms of most locals' ways of working where the actual India-level scale is, and not the primary way of transacting as in the US. And looking at how Visa a…

Most mom and pop stores (Kirana stores) in India cannot get a PoS device easily. UPI solves this problem by being much easier for merchants to onboard and start accepting payments with just a QR code instead of a PoS device.

Re: UPI: Anatomy of a Payment Transaction

#53

Post by devsda »

ashkulz wrote: post #48
satvikpendem wrote: post #42

Earlier quoted context omitted.

Most places will not have change so you need to carry exact cash change all the time. And many are indeed stopping using cards and switching to UPI as the fees are much less, unless they are particularly foreigner friendly, like a hotel in a tier 1 city.

In fact, card acceptance has gone _up_ in my experience. Unless you're using a very small shop which just has a QR code, most businesses now use a POS which supports a lot of payment methods including cards. I agree that a lot of businesses now actively don't manage cash as they used to earlier... it's very difficult to get low-value notes as the central bank seems to be slowly reducing the supply by not printing as…

> card acceptance has gone _up_ in my experience.

Yes acceptance may have gone up, but I think thats a side effect of normalizing digital transactions popularized by UPI.

Re: UPI: Anatomy of a Payment Transaction

#54

Post by mayama »

nafey wrote: post #51
sometimes_all wrote: post #49

Earlier quoted context omitted.

What does this have to do with credit cards? India always had credit cards at a scale comparable to most countries, and they always were a regularly-used of payment for medium-sized "white" transactions; they just weren't that useful for day-to-day transactions in terms of most locals' ways of working where the actual India-level scale is, and not the primary way of transacting as in the US. And looking at how Visa a…

Most mom and pop stores (Kirana stores) in India cannot get a PoS device easily. UPI solves this problem by being much easier for merchants to onboard and start accepting payments with just a QR code instead of a PoS device.

Not just about PoS device. During early credit/debit card days, lot of stores would pass on merchandise fees directly to customers, giving discount in case of cash transactions, some stores still charge extra. This is not allowed in west as credit cards require same price as cash transactions, and most users perceive credit card rewards as something positive as one would lose out on this rewards when using cash. In India perception is that one would be making loss* if using credit cards. UPI with no fees as of now, is perceived as equal to cash by most people not dealing with black money.

Re: UPI: Anatomy of a Payment Transaction

#55

Post by prtk25 »

sometimes_all wrote: post #52

The content is good, but the crore/billion toggle is fantastic. A great addition, I hope it catches on in India-specific websites. I just wish it had a tooltip because its purpose was not immediately clear (CR/BN is a bit cryptic).

Thanks for the feedback! I will try to make it clearer.

Re: UPI: Anatomy of a Payment Transaction

#56

Post by [deleted] »

mayama wrote: post #54
nafey wrote: post #51

Earlier quoted context omitted.

Most mom and pop stores (Kirana stores) in India cannot get a PoS device easily. UPI solves this problem by being much easier for merchants to onboard and start accepting payments with just a QR code instead of a PoS device.

Not just about PoS device. During early credit/debit card days, lot of stores would pass on merchandise fees directly to customers, giving discount in case of cash transactions, some stores still charge extra. This is not allowed in west as credit cards require same price as cash transactions, and most users perceive credit card rewards as something positive as one would lose out on this rewards when using cash. In I…

[deleted]

Re: UPI: Anatomy of a Payment Transaction

#57

Post by tecoholic »

blackoil wrote: post #36
tecoholic wrote: post #34

Earlier quoted context omitted.

I would guess NPCI being a private body with transaction charges being borne by the Indian government is a net negative in the long run. It costs everyone. NEFT and RTGS on the other hand is RBI regulated with clear pricing and costs only those involved. The cost structure needs to change, but then, it won’t be possible. To pay 5 rupees for a chocolate with your phone and get even 0.5 added on top would make the cons…

NPCI is a public sector company with partial ownership between 46 banks. Its costs is trivial compared to savings and efficiency it brings in overall system. Cash handling is very costly for entire chain. Printing by RBI, its logistics by banks and handling by vendors. Apart from that it is formalization of informal economy, govt has better visibility, tax evasion is difficult and people outside financial services ca…

Fair enough. I am not knowledgeable enough to debate if it’s a net negative or positive. But “savings and efficiency” also has a negative side where people have lost life savings and bank accounts emptied in a matter of minutes.

UPI doesn’t help much with tax evasion. The biggest vehicle of tax evasion is property and cash is still the king there. UPI has been a good quality of life improvement for everyone. However there’s been cost involved, that should be considered.

Re: UPI: Anatomy of a Payment Transaction

#60

Post by altmanaltman »

sometimes_all wrote: post #49
dominotw wrote: post #40

Earlier quoted context omitted.

it worked because india never had credit card payments( at scale ) . they went straight from cash to digital payments.

What does this have to do with credit cards? India always had credit cards at a scale comparable to most countries, and they always were a regularly-used of payment for medium-sized "white" transactions; they just weren't that useful for day-to-day transactions in terms of most locals' ways of working where the actual India-level scale is, and not the primary way of transacting as in the US. And looking at how Visa a…

It has everything to do with credit cards if you understand what the parent comment is saying. Credit card allowed people to use something else other than cash when internet banking/digital payments wasn't available and smartphones were not a thing. Their entire society adopted credit cards as a very normal way of payment even for everyday stuff since it offers convinence over cash and rewards.

Yes India got credit cards but it was not widespread and people did not use it as a daily thing since most stores/outlets did not have the card swiping system. UPI solved this problem very well since you just need a QR code and a valid bank account and no transaction charges making it perfect for day to day spending.

We got digital payments and smartphones together. But in the US for example, credit cards came much earlier and were able to capitalize very well since there wasn't a lot of the technology at that time which we take for granted today.

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