The Country With the Most DIgital Payments: India (economist.com) 45
India's government gave nearly early household a bank account offering app-based digital money transfers, reports the Economist. But that's just the beginning:
Take a walk on Mumbai's Juhu beach and little has changed in five years — except for the QR codes adorning every food stall. Go to São Paulo in Brazil, Beijing in China, or many other cities across the emerging world and you find something similar. "Most people only want to use UPI," says Govind, a seaside-snack vendor at Juhu, referring to India's fast-growing payments network. The Unified Payments Interface (UPI) is a platform that allows free and fast account-to-account transfers using fintech apps such as PhonePe or Google Pay. Unlike Alipay in China, it is open, so users are not locked into a single company and can take their financial history to competitors, notes Praveena Rai, the chief operating officer of the National Payments Corporation of India (NpCI), which manages the platform. And it is facilitated by QR codes or easy-to-remember virtual IDs.
UPI is drawing attention from across the world. "Look at what India has accomplished with the UPI, Aadhaar and the payments stack," Sundar Pichai, Google's CEO, has marvelled. Overall, it processed over $1trn in transactions in 2022, equivalent to a third of India's GDP. It was bolstered by the government's surprise "demonetisation" of 2016, when multiple high-denomination banknotes were discontinued. UPI also benefited when covid left consumers scared of cash. It has grown from around 17% of 31bn digital transactions in 2019 to 52% of 88.4bn transactions by 2022. "India leads the world in real-time digital payments by clocking almost 40% of all such transactions," Narendra Modi, the prime minister, has boasted.
The Indian model is inspiring others. Brazil's Pix, which facilitates bank-to-bank payments with a small fee, was launched in November 2020. It now accounts for some 30% of Brazil's electronic payments (credit and debit cards take up around 20% each). Such open instant-payment systems are an alternative both to the bank/card model in the rich world and to the closed fintech one in China... The hope is that UPI and similar systems might now let some poorer countries leapfrog the West... Mr Nilekani hopes UPI will eventually be used everywhere. "If I go to Lulu in Dubai or Harrods in London, I should be able to make a payment with UPI." That would surely create new competition for the bank/card behemoths in the West.
UPI is drawing attention from across the world. "Look at what India has accomplished with the UPI, Aadhaar and the payments stack," Sundar Pichai, Google's CEO, has marvelled. Overall, it processed over $1trn in transactions in 2022, equivalent to a third of India's GDP. It was bolstered by the government's surprise "demonetisation" of 2016, when multiple high-denomination banknotes were discontinued. UPI also benefited when covid left consumers scared of cash. It has grown from around 17% of 31bn digital transactions in 2019 to 52% of 88.4bn transactions by 2022. "India leads the world in real-time digital payments by clocking almost 40% of all such transactions," Narendra Modi, the prime minister, has boasted.
The Indian model is inspiring others. Brazil's Pix, which facilitates bank-to-bank payments with a small fee, was launched in November 2020. It now accounts for some 30% of Brazil's electronic payments (credit and debit cards take up around 20% each). Such open instant-payment systems are an alternative both to the bank/card model in the rich world and to the closed fintech one in China... The hope is that UPI and similar systems might now let some poorer countries leapfrog the West... Mr Nilekani hopes UPI will eventually be used everywhere. "If I go to Lulu in Dubai or Harrods in London, I should be able to make a payment with UPI." That would surely create new competition for the bank/card behemoths in the West.
EMVCo's monopoly needs to be broken (Score:3)
That would surely create new competition for the bank/card behemoths in the West.
More importantly, it would loosen Mastercard / Visa / Amex's grip on the payment industry, and particularly their ability to deny people and organizations they don't like the ability to make or receive payments, as they demonstrated time and time again with porn providers, Wikileaks, etc. The same holds true for Paypal incidentally.
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The various levels of government are influencing this as well. I don't know if it went through but there were threats of holding up payment processing by private companies and/or government regulators when dealing with firearms, marijuana, and so much else. It wasn't just the credit card companies. I know the credit card companies at least tried to deny services to people they had some political or philosophical problem with, but it didn't stop there.
There was a deal with states that dealt only in cash f
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"federal government passed a law that left marijuana legalization to the states"
No they didn't. The House passed a Bill to that effect, but it has yet to pass the Senate or be signed into law by the President.
https://www.congress.gov/bill/... [congress.gov]
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The likes of Paypal, Apple Pay, Google Wallet et al sit on top of these payment processors, exacting their own fees.
Anyway there is absolutely no way that UPI or other domestic payment system is just going to be implemented outside of its territory. A shop in the UK (for example) isn't going to take payment from UPI from unless the app gives the user a virtual Mastercard or something. I don't see that ever changing ever.
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deny people and organizations they don't like the ability to make or receive payments, as they demonstrated time and time again with porn providers
You pay for porn providers? You must be new to the internet.
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Also, "digital" requires lots of infrastructure. One outage and your access to your digital money is out. One catastrophic failure without backups and your digital monies are gone. Even the US isn't that great, with their rolling brownouts and all that. India? Er.
There's infrastructure involved but infrastructure with a lot of redundancy.
I know that in the USA the cellular phone towers have backup power in case of a blackout. If money is moved by some smart phone app then the chances of an outage is quite low. The Internet Protocol behind these apps is built to quickly route around damage in the network, so outages in that will be rare. Assuming the people running these apps are in any way reasonably smart they will have the back end servers configured for redund
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The cell towers do have backup power, but depending on the load on the tower, that backup might only last 4 12 hours.
Can we not have pay-walled articles featured? (Score:2)
It is quite annoying to see links to articles and be greeted with an offer to pay to read the content. I can find free news in lots of places. If the news is big enough then someone will put it somewhere that I don't have to pay to see it. Well, the content is rarely free in the strictest sense as I'd have to pay in my time to see the adverts.
With that rant out of the way I'll get to a point on topic...
India is a nation with a lot of people, so many people that even an moderately popular trend will have
Brazil's PIX has no fee (Score:1)
It is all about tax collection (Score:5, Interesting)
Re:It is all about tax collection (Score:4, Insightful)
People of India support government plugging the tax evasion and tax dodging. Their main complaint is corporations, small business etc engage in rampant tax evasion, but the middle class salaried class is taxed strictly.
Digital transactions help tamp down on the purchasing power of black money. Black money is life blood of corruption. Reducing its purchasing power is a primary requirement to reduce corruption.
In the west a million dollars in a brief case is not as valuable, as spendable, as a million dollars in the bank. It is not the case in India. Lots of big denomination transactions happen on cash. Restricting the ability of laundering black money through retail businesses is a very good thing for India.
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Yeah, I was surprised once when I was in India and was just following someone who was in the middle of buying some property (land). Followed them around just to get some insight and realised that the seller was requesting payment in cash.
The deal involved stacks of cash being given in one of those cloth bags. Something like 3,4million rupees (I think it's called 30-40 lakhs in India). I think biggest note denomination was 500 rupee? The buyer had to inform his bank one day prior to drawing the cash, then dr
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To discourage under declaring the value, the government has the option to pay the declared value to the seller and take over the land and sell it in auction.
Did it reduce under valuing assets? nah, it just made the powerful sub-registrar (of deeds) even more powerful and demand higher bribes ...
Tax collection and Bribes (Score:2)
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To use the Chinese one I had to provide the government, via my Chinese bank, I whole lot of proof of who I am. A few months later it stopped working until I did that process again. As a non-resident of China it was a huge hassle for a
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This was indeed one of the goals of India's banknote demonetisation [wikipedia.org] which started in 2016. There were lots of skeptics at the time but it sounds like it might be panning out!
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It is not the transactions that the govt is looking for. It is the formalization of the informal economy that till a few years ago entirely dealt only in cash. A formalized economy does wonders for businesses, even if they have to pay taxes. They get access to formal (and cheaper) credit, they get access to govt support for expansion, a future safety net of some kind.
By lack of proper banking infrastructure (Score:2)
It is very easy and dirt-cheap to transfer money from your account to any other, even to accounts in countries without Euro like say Denmark.
In The Netherlands there is since 2005 also the iDeal system making it even easier to transfer, it is free for the consumer, the retailer has to pay a small fee per transaction. iDeal is now going to be expanded into other countries through the
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The question is how interesting iDEAL will be when all SEPA banks will joint SEPA Instant Transfer eventually. Especially, considering some uptime complains about iDEAL (at least on wiki). Well, SEPA is quite quick even now - the transactions are finished in 24 hours at worst.
https://www.ecb.europa.eu/paym... [europa.eu]
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SEPA Instant Credit Transfer is just like a common SEPA transfer in my internet banking. One just needs to check "Instant transfer" checkbox). Otherwise it is the same. Instant transfer is settled immediately and not in 24 hours like common SEPA. I do not think you need any payment processor. ECB settles the instant transfers between banks.
I'm just curious how Instant Transfer will compete with Credit/Debit cards and iDEAL. Well, Credit/Debit cards have an advantage that the payer does not need a mobile ph
Who is Counting? (Score:2)
Low smartphone ownership (Score:1)
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That figure seems very low. This source gives a figure of 750 million smartphone users in India:
https://www.fortuneindia.com/t... [fortuneindia.com]
Most western people I know still use credit/debit cards rather than smartphones to make payments.
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What you've said is that someone, somewhere, in your country's government can tell every time, and everywhere that you've spent any money.
All my government can tell about me is that I may be spending up to $1500 cash every month.
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...And you believe that, somehow, that makes you better than the plebe.
Oh well...
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Why can't you tell us which country it is so we can fact check/context you?
Its the greed of duopoloy that is killin us / US (Score:2)
India rightly believes a financial transactions infrastructure is a public utility, like highways or sewer system. Paid by taxpayers. It directly connects bank account to bank account, cutting out the middle man. It is expanding to Singapore. It has the potential to expand to entire east Asia, given the size of India, its proven ability to handle billions of mic
So, this is a good thing? (Score:1)
People in third-world countries put all of their financial transactions inder control of corporate power. And that's a good thing?
They were pioneers on mobile payment (Score:2)
Back in 2010, India was the test market for Nokia Money. It did well, but was shut down in 2012. (Man, was there ever a shitter CEO than Stephen Elop?)
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Nokia Money did well? Where?
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As I said, India. Or so I've heard. Then Elop killed it because he didn't want anything that made non-Windows phones attractive.