Great Read ! Thank you for such detailed introduction to UPI, I'm lookingfor such articles for mastercard or VISA
UPI: Anatomy of a Payment Transaction
101–110 of 137 posts
Re: UPI: Anatomy of a Payment Transaction
#102For 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…
Systems that are based on one-time codes instead of permanent credentials are really under-appreciated in the anglosphere. Giving your credit card to your child / friend / spouse / subordinate, so that they can buy something with your money, is a lot more risky than giving them an OTP, valid for a single transaction, which you have to approve in your app anyway. Poland's Blik is based on 6-digit codes, which makes th…
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Re: UPI: Anatomy of a Payment Transaction
#103For 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.
This is implied in an authoritarian country like India.
However, the Government is in a fix. Almost the complete stack is subsidized by the Government. This led to an explosive adoption growth for merchants as there is no MDR and payers for ease of transaction as they don't need to carry hard currency anymore. This has enabled the Government gaining complete insights into spending and earning patterns. Withdrawing this massive subsidy will again lead to people using cash. So in order to prevent "terrorism" they will subsidize for the foreseeable future.
Re: UPI: Anatomy of a Payment Transaction
#104For 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…
Systems that are based on one-time codes instead of permanent credentials are really under-appreciated in the anglosphere. Giving your credit card to your child / friend / spouse / subordinate, so that they can buy something with your money, is a lot more risky than giving them an OTP, valid for a single transaction, which you have to approve in your app anyway. Poland's Blik is based on 6-digit codes, which makes th…
Because those OTPs can be intercepted by any MITM unless you are using on-device 2FA generated by an app.
Re: UPI: Anatomy of a Payment Transaction
#105Centralized, kyced, private money transaction network. Is this something good?
It is practical. When mobile wallets was taking off a lot of people starting pitching "blockchain technogloy" in fintech and said decentralization needs to be the foundation for everything. The whole process largely become about technogical philosophical discussion about decentralization, p2p, intermediate crypto transactions, stablecoins etc. A lot of consulting firms made a shit ton of money while at the end of the government agencies and banks was scratching their head trying to find out how they "invested" millions without an iota of progress in terms of product development. The conclusion largely was fintech innovation should not be led with governments.
If you look at very large scale IT infrastructure engineering, a lot of times those technologies are developed and sold to governments by US or west EU government controled or influenced companies that does impose to some degree to the sovereignty aspect of a government.
So, with decentralization discussion most government lost a ton of money to consultants. They could wait for to buy off the shelf software that comes control risk. Or they could accept the risk and limitations and build a software that works now.
I think india made the right choice to build a system on framework that is proven and predicatable.
Re: UPI: Anatomy of a Payment Transaction
#106I have the utmost respect to people who makes UPI work. Made even the old people in the nation completely go digital for payments - a feat unparalleled in the world.
I think it was the same with PIX in Brazil, and Swish in Sweden, and probably many more precedents.
Don’t know about Swish but UPI heavily influenced Pix, from its open architecture, alias-based addressing, and QR code infrastructure
Re: UPI: Anatomy of a Payment Transaction
#107Earlier quoted context omitted.
Thanks for the additional info. But I want to clarify one thing - I didn’t say anything about cash being a better choice. Both the comments to my response are making it out to be a cash vs digital thing. I am not sure why. Next, NPCI is a PSU. So what? They are taking govt money to function aren’t they? The costs are borne by the banks which get allocations every budget to keep the system running. So whatever “profit…
You’ve literally stated that you are “not knowledgeable enough to debate if it’s a net negative or positive.” and then you’re wondering why someone who has a significant amount of knowledge about the system in question is finding it “hard to accept the shortcomings of the system and acknowledge the cost of running the system”. The real question is that given that you don’t know anything about the system, why would yo…
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Re: UPI: Anatomy of a Payment Transaction
#108Earlier quoted context omitted.
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.
This is implied in an authoritarian country like India. However, the Government is in a fix. Almost the complete stack is subsidized by the Government. This led to an explosive adoption growth for merchants as there is no MDR and payers for ease of transaction as they don't need to carry hard currency anymore. This has enabled the Government gaining complete insights into spending and earning patterns. Withdrawing th…
India is not an authoritarian country ffs
Re: UPI: Anatomy of a Payment Transaction
#109Earlier quoted context omitted.
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.
Discounts coupons are legally allowed based on payment method type. Seller often provide discount coupons when you use UPI payment method.
Re: UPI: Anatomy of a Payment Transaction
#110Earlier quoted context omitted.
After adding UPI as a payment option to my little microSaaS, I'm finally starting to see sales in India. Was like trying to extract hen's teeth to get an Indian to sign up before that.
Yes this. Anytime a SaaS supports UPI Autopay, I'm 10-100x more likely to subscribe. For context: it's basically a recurring payment but you open the Autopay section in Google pay or whichever app and it shows you all your subscriptions right there (which is a major +), the transaction history, and cancellation happens in the UPI app itself I don't have to faff around in the SaaS and deal with potentially some dark p…
That’s absolutely huge. All your subscriptions in one place that you can just turn off from there directly. It’s one of my favorite things about payments going through the apple App Store.