What funds the UPI system? I assume that it’s cheaper than MC/Visa rails?
UPI: Anatomy of a Payment Transaction
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Re: UPI: Anatomy of a Payment Transaction
#92I can sense Claude behind all interactive graphics here, yet it apparently does great job to further make the point and interestingly TimesOfIndia is a major media outlet.
It's Time Series of India, not Times of India.
https://timeseriesofindia.com/about
https://github.com/time-series-of-india/tsoi
I also thought it was from Times of India initially
Re: UPI: Anatomy of a Payment Transaction
#93Earlier quoted context omitted.
Well, yes, but you conflate that credit cards would've worked, had they been available/easy, in a place like India, which in many ways rejected and still sometimes rejects the kind of thinking which makes credit cards successful in places like the US, which is what the GP was saying. People up until one-two generations ago completely rejected the use case for credit cards for payment, since they just did not want to…
I'm not sure what you mean. You also need to look at the whole environment and other factors than just "People just didn't feel they wanted to use it". In 1961, India was extremely poor and it has been until the 90s. Credit cards at that time did not solve any problem, people had no use for them and the culture of using it never grew as it did in the US but UPI gained acceptance because the country was doing much bet…
> You seem to either not have an understanding of ground reality (if your father was using Diners Club in the 60s, he was in the elite).
Well, I wouldn't say "elite", but well off (at that time), but that still doesn't mean that card networks couldn't have made themselves useful if they/the government wanted to. Poverty is not a gating mechanism. Plenty of poor people in the US use credit cards - they practically fund the rewards system since they cannot pay on time - and I seem to remember that the first Americards were figuratively dropped from the skies, regardless of the holder's income or debt levels, which was then used to coax merchants into accepting them. Such sort of "growth" tactics would not have had an effect here since neither the government nor RBI would allow it, nor would the people take too kindly to it. And let's not disparage people for not understanding ground reality. What I'm saying still has basis in fact, just possibly not the facts you seem to care about. The point about people not wanting to use credit cards still stands. Just talk to someone > 60 years old and you'll get the drift. Many wouldn't touch a revolving credit feature here even if it was forcefully handed to them and they could easily use it. As much a fan my dad was of Diners Club, he still told me to not touch a credit card until I had at least twice as much income as expenses.
I don't disagree with you entirely, and your points are not the reason I talk about the sixties and eighties; I talk about them because many people seem to think that India did not have the systems there at all, and that India did not have enough well-off people in the past at all, or that India did not have any sort of knowhow or capability to introduce systems like credit cards (and make it work for quite a bit of the population) at all. That part is incorrect. The systems were there, they just failed for the "hundreds of millions" at that time while still working for the "few million", plus they still hung around enough to succeed now because clearly the potential was always there. Just because they didn't catch on quickly did not mean that they weren't there or were not useful to a subsection of the population. You cannot just go "straight to the digital payments phase" without acknowledging that things were there and what their trajectories were. People seem to forget that relative small scale "of solving problems" for India in terms of adoption is large-scale for other countries. A single-digit percentage acceptance in this country can swallow many countries' populations, poor or otherwise.
Re: UPI: Anatomy of a Payment Transaction
#94What funds the UPI system? I assume that it’s cheaper than MC/Visa rails?
It's an industry-owned initiative, i.e. all licensed banks, including the central/apex bank (pretty sure this is the Federal Reserve in American parlance?) are stakeholders. The funding comes almost entirely from these banks, and the transfers themselves are free (between personal/individual accounts, at least). I'm pretty sure the government partially reimburses the banks to soften the cost, so I suppose you could say it's also funded by government subsidy?
Some similar systems have transaction fees and run as for-profit organisations, but the fees are tiny compared to card transactions. For instance Nigeria's NIP has a maximum fee of ₦53.75 (roughly four cents), with most banks allowing you to transfer up to ₦5 million in a single transaction.
Re: UPI: Anatomy of a Payment Transaction
#95For those outside India and/or non-active users of UPI - it drives so many transactions that even for an engineer, I forget how often I use it: - Payments between family members - Payments for every tiny/small item - a bag a chips or a cup of tea for example - Payments for car mechanic, plumber, or other services - Payments for online shopping or services - yes web apps show the UPI QR code and I can pay from my phon…
Do you have plans for when the government interprets your small payments as terrorism and seizes your bank account?
I think every country goes through this and then goes back to cash, but at different rates.
Re: UPI: Anatomy of a Payment Transaction
#96Centralized, kyced, private money transaction network. Is this something good?
KYC and centralisation means govt will promise your money is there. These are essential for dev country or 3rd world. Even with so much kyc often there are fraud. This has minimised fraud. If you are looking for RMS style freedom etc then look elsewhere. This is not Iceland or Nordic. One another overlooked issue is India was the largest printer of currency. Until UPI etc modernisation - lots of torn currency - usual…
We've seen basically every country in the world make promises and break them. Right now your money is there, but give it less than 10 years until someone is decided to be a terrorist based on their transaction pattern, and all of their money is taken away.
Re: UPI: Anatomy of a Payment Transaction
#97Re: UPI: Anatomy of a Payment Transaction
#98UPI is fantastic software and the pride of great software engineering from India. Excellent engineering. I only wish more countries would implement something like UPI in other countries and get rid of inferior and broken solutions like crypto.
I too want the government to monitor my transactions in real-time so they can disable access to my money if they think I'm a terrorist.
Re: UPI: Anatomy of a Payment Transaction
#99For those outside India and/or non-active users of UPI - it drives so many transactions that even for an engineer, I forget how often I use it: - Payments between family members - Payments for every tiny/small item - a bag a chips or a cup of tea for example - Payments for car mechanic, plumber, or other services - Payments for online shopping or services - yes web apps show the UPI QR code and I can pay from my phon…
Do you have plans for when the government interprets your small payments as terrorism and seizes your bank account? I think every country goes through this and then goes back to cash, but at different rates.
Do you have any examples?
Re: UPI: Anatomy of a Payment Transaction
#100Earlier 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…
> This is not allowed in west as credit cards require same price as cash transactions
Network rules disallowing customer surcharges have actually become prohibited by law in quite a few places.