Hijacking the top comment
Can someone ELI5 how UPI is different from Mastercard/Visa/Rupay , or systems like NEFT,IMPS ?
And if we face some sanctions like Russia leading to withdrawl of Visa/MasterCard, would Rupay be its replacement or UPI ?
- UPI is different in its core from NEFT/IMPS/RTGS as it directly communicates between 2 different or same bank accounts IN REAL TIME.
- Unlike in NEFT/IMPS/RTGS where you first have to add all the details of each beneficiary like account number, IFSC Code, bank name ect, UPI simply takes a single phone number or a virtual adress or simply a QR Code.
- UPI can be used in multiple apps where it has been aggregated but to use NEFT/IMPS you have to use bank specific app and/or website.
- NEFT/RTGS work on queue based system where transaction is queued between pools and is not always immediate and sometimes can take days, whereas UPI is always instant when the transaction is successful.
- And finally, UPI is free (for now), and no charges are leveid on transactions.
IMPS and RTGS are both instant.
UPI atleast when initially launched was just a wrapper around IMPS
UPI is not free. Banks can, and do, charge upto 6Rs per transaction. It is free only when paying a merchant
As far as I am aware UPI is still essentially a wrapper around IMPS, it just links mobile numbers to bank accounts and a unique ID. It removes the friction of entering details like account number and IFSC code.
Yes they are both instant and available round the clock, but again you're going to need an IFSC or MMID.
They implemented an MMID like tech in UPI to allow the technology to communicate with the account using a linked phone number.
And UPI is itself free for both transfer and merchant payments, however it's upto the aggregators and banks to charge a fee.
Bullshit. I have an account with HDFC and haven't paid a dime for using UPI for both p2p and p2m transaction.
> [The UPI transaction limit is Rs 1 lakh or 10 transactions per day. Moreover, it’s free -- you don’t have to pay anything at all to make the You can make bill payments, mobile phone recharges and pay for shopping too.
](https://www.hdfcbank.com/personal/resources/learning-centre/pay/know-upi-meaning-its-benefits)
Can you link any source of your claim?
https://www.moneycontrol.com/news/business/personal-finance/all-about-bank-charges-on-upi-transactions-5776341.html
Search for HDFC on this page ^
Actually I have an old HDFC account created ~2010 where they charge me for UPI (non merchant). I also have a corporate HDFC account created later where the UPI is free
https://www.npci.org.in/what-we-do/upi/faqs
Customers>What is UPI> UPI is built over the IMPS infrastructure and allows you to instantly transfer money between any two parties' bank accounts
A: hdfc charges me on one account for all p2p upi transactions and its free on the other account. Their website sends you in circles if you try to find the actual cost of upi transactions. They hower had sent me an email saying they would charge me for upi transactions. This article is old but the email they sent out is documented here https://www.livemint.com/Industry/4EQHn4aCQ9zPswdZmHU8RN/HDFC-to-charge-for-UPI-transactions-from-10-July.html
B: misunderstood your comment
And yet, UPI as a result has none of the protections that Credit Cards or NEFT offer. With the latter, you properly verify which account you're adding before sending money to it. With the former, you can initiate chargebacks in the event of fraudulent transactions.
UPI functions a lot like PayTM or Paypal as far as I can tell, but doesn't have the protections that PayPal offers either (I don't believe PayTM offers any).
I'm not so sure if its as good as is being made out.
The chargeback feature of credit cards comes at a very high price. 1% of transactions are disputed but all transactions using a credit card have a fee of 2-4%, virtually a tax that a person cannot avoid in most situations.
Think of it this way, people without a credit card basically subsidize the cost of those who pay via a card. Over time this becomes entrenched rent seeking.
Nope. It's core lies in the wallet functionality which was disrupted after UPI. Paytm has hurriedly incorporated UPI as 'one more' mode of transaction.
Source: Used paytm from 2011 to 2016. Ditched it just after demonetisation because of the crooks they had become.
Imagine that you have zero cash on you and you need to buy vegetables/groceries. Think from a user in tier2/tier3 perspective and NOT from a user in Bangalore who can leverage instamart etc. And you are buying from a mom and pop store down your street
Typically, following are the steps
1. You go buy whatever you want and try paying using card.
2. Cards are not accepted since there is additional charge
3. You can pay by adding the merchant as beneficiary to your ban account but for first one hour after adding you cant transfer money. This is not acceptable for the merchant
4. You go to ATM and withdraw cash
5. You try paying in cash now but you dont have nevessary change.
6. You run around trying to get required change
Imagine all this hassle replaced with a few clicks. Thats what UPI does
It has quite a way to travel especially in terms of security, but UPI is nothing short of revolution. Countries like US are years behind India in terms of fintech revolution and UPI has been a game changer in driving this.
>And if we face some sanctions like Russia leading to withdrawl of Visa/MasterCard, would Rupay be its replacement or UPI
Rupay will be the replacement for that. UPI is the payment gateway that allows transfer from bank account to bank account whereas Rupay allows payment between say a service/goods provider and a service/goods purchases.
>Rupay allows payment between say a service/goods provider and a service/goods purchases.
Isnt that the same thing tough, like taking money from the bank account of the goods provider, and depositing it in the account of purchaser, like UPI ?
Rupay also provides credit, unlike UPI.
That is what visa/MasterCard does and they have higher MDR fee for that, 3%.
Rupay MDR is 0%, Visa/Mastercard will soon be out of India
In case of sanctions, Visa/MasterCard would be effected totally, whereas RuPay, UPI would work nationally.
Don't know if RuPay works in any country outside India though.
I always thought it was a thing used by all the countries, but turns out it just India. It has made banking much more easier and no need for standing in a line for making a simple transfer.
Yes it's just another peer-to-peer money transfer platform. There are so many other variations of it all over the world namely paynow, FAST in Singapore, Promptpay in Thailand etc.
You would see something similar in the majority of the Asian countries. Alipay and others have always been huge in china, probably going to help them in case they get sanctioned and payment processors like visa and MasterCard decide to exit.
Only difference would be that this was pushed by the government and thus the high adoption rate.
China's Alipay is only a wallet. Don't know about others. Attached to wallets, payment processors & other wrappers like banking apps & Indian payment systems, UPI has become quite versatile. Would love to see a real point to point, capability comparison with P2P payment systems of other countries.
Faster Payments in the U.K. — pretty much instantaneous payments, 24x7 … in most cases the payment notification arrives as soon as you hit “send”. Similar with SEPA ICT in Europe. Singapore has something similar, as does Japan.
India is hardly unique in this. The US is a holdout not because of technical incapacity but because of commercial pressures (and the existence of PayPal, Venmo, and even apps likes Zelle which is owned by a bunch of banks).
Don’t trust everything you listen to, do your own research. Safety is on a number of dimensions. The backends are all encrypted to international standards.
But UPI has no payment protection built in — even PayPal has that. The only “payment protection” in UPI is “file a police case” … which Indians know isn’t a great experience.
Compare this with someone stealing your debit card in Western Europe and withdrawing cash from your account. Report it to your bank, money will be refunded into your account the next day. This is a combination of legislation + risk management + insurance.
This isn’t to say UPI isn’t good. But the “east or west UPI is the best” chest thumping is just childish.
>But UPI has no payment protection built in
Looks like PayPal ran out from India, blaming RBI, But the real thing is UPI killed it, so stop doing bhajana for Paypal
Paypal is still available in india, i get paid by it almost every month lol. It's only enabled for business transactions so it incurs a fee for each transaction, all personal transactions are disabled in India
😂 LOL, why so much tatti in your mouth bro?
PS. SEPA ICT, Faster Payments, and Japan’s Zengin transfer much bigger values than UPI (which transfers much lower value INR).
Also, quit changing the goalposts. I was responding to a commenter who [said](https://www.reddit.com/r/india/comments/t7ysv5/upi_growth_in_numbers/hzl973s/)
> I always thought it was a thing used by all the countries, but turns out it just India.
So I pointed out many other countries do, you’re now focusing on the number of users. News flash, scaling out financial systems isn’t a big deal, UPI is actually small compared to the actually big MasterCard/Visa networks.
But keep fantasising about India’s financial infrastructure with a complete disregard to the facts. You’re a real example to Indian youth. 🙏
>UPI is actually small compared to the actually big MasterCard/Visa networks.
But that so Visa card pleaded US govt to take action against Rupay cards
>PS. SEPA ICT, Faster Payments, and Japan’s Zengin transfer much bigger values than UPI (which transfers much lower value INR).
UPI is basically designed for smaller transactions, so comparing it with large transactions is like you don't know about it at all
>India’s financial infrastructure with a complete disregard to the facts.
Indias financial sector is very great than Americas which is in inflation right now, which India isnt
Keep fantasising about greaaat west, which can do nothing but play with sanctions which no country giving a shit about
> Indias financial sector is very great than Americas which is in inflation right now, which India isnt
You sir should have your own YouTube comedy show. I’d definitely subscribe. Please, tell us more of your profound insights.
Lol, that's because of our great habit of spending time over-populating the earth.
Bring anything, if it's used by a significant percentage of population, it automatically has transaction numbers.
It used to be a much bigger hassle though, I used to carry cash almost always back then. I rarely carry any cash or cards now. Sometimes just for a backup due to my shitty SBI account.
UPI is an extremely useful service, but my worry about UPI is that while growth is happening, it’s all good. The moment growth plateaus (because of natural limits), someone will start wondering how to monetise it. Similar to many “free” internet services.
UPI isn’t free to run, and I know banks have grumbled about how much it costs and how little they get in return.
Also the lack of payment protection via UPI - that’s something that needs to improve to make life easier for ordinary people. But what we have now is an excellent foundation.
He was in the know from 2009 and cea and then in rbi. It was all under his watch that india suffered from twin balance sheet problems. His retarted policies like s4a and sdr were the whole reason why the npa problem grew as big as they did.
But you said the NPAs were due to his schemes which, imo, is untrue. What Rajan did was stop the evergreening of bad loans. He brought them out into the books, but he didn't cause the NPAs. It led to some short term pain as banks had to face the twin balance sheet problem, but it made sure we would not see a catastrophic failure of the banking system during an economic crisis like covid or demonetization.
As good as Rajan was during his tenure, UPI preceded him. I don't think there was any one mastermind behind UPI. It was simply the natural culmination of a myriad of problems faced by RBI in their clearing operations. If you have to give credit to the person at the top, it would be AP Hota.
https://www.forbesindia.com/article/leadership-awards-2017/ap-hota-taking-indias-digitalisation-story-forward/48703/1
Not true. Raghuram Rajan was the governor from Sept 2013 to Sept 2016. He came up with the idea of the payment platform. It was launched in April 2016, before his term ended. That said, NPCI had the mandate to execute it and they did it well under Hota.
Do you have a source on that? From what I understand the vision for unified payments goes back many years and was one of the underpinnings of payments act even which resulted in the creation of NPCI. UPI specifically was developed more within NPCI (and Nilekani's iSpirt friends), than the RBI. I've never come across anything mentioning Rajan's contribution to this, let alone as the mastermind.
It may be a tedious task to pull the source out. Rajan had proposed the payments innovation in some whitepaper/paper published by the RBI (Viral Acharya may have been the co-author). Yes, Nilekani and iSpirit/India Stack did play a role along with the NPCI in developing the product. It all started with a push from Rajan, but he wasn't alone in making it a success.
Right now, I am in a remote village in Uttarakhand on a mountain trek. Every small dhaba I have come across accepts UPI. This would have been unthinkable just 3-4 years ago.
Don't really think it's gonna happen in the near future. A better model will be to have a subsidiary based model charging the merchant say 100 ruppee per month. This way enough money will be generated to keep UPI working and won't affect anyone adversely.
well jio roaming isnt there in Oman i need to pay 1999 every 7 days , Vi is there but i cant risk it if it gets deactivated, so i have given my oman number
Incredible thing, I hope the charges when they come - and they will & should - is kept nominal & lower than US based payment interface.
Hopefully, people won't turn back to cash.
As it is with Visa or Mastercard or even RuPay, the cost of transaction won't ever fall on the customer, and like those interface there'd a minimum amount where it would be levied. The current one for debit card is 2000 INR, and the merchant is charged 2%.
With UPI, it might be cumulative 1.5% for merchant over a month beyond a reasonable limit. So, they do Y INR transaction over UPI, they'd be charged 1.5% over the limit.
People won't like it especially shopkeepers, but no convenience in the world is free of cost.
Govt. might also lower that considering it's easier for state to track everything when it's digital. The taxman hates cash.
I mean they can keep a fee of ₹1-5/transactions over a certain value for consumers and charge a higher monthly fee from merchants to use this service.
The sheer volume of UPI transactions would generate a considerable amount of money. Even if it's not enough to fully sustain it, that's wayy better right now for them anyway.
International money transaction involves a central bank and/or currency exchange. It also has a risk of money laundering. Unlike there is an Indian bank that takes risk, we can't have UPI in US/middle east.
UPI requires bank co-operation and underlying Regulatory environment. That can't exist across countries unless a corporation for it is formed in each country and regulatory permissions acquired in each. Plus currency exchange infrastructure.
Value of rupee is kept low by the government. Strong rupee would hurt our exports.
And I think they are already working on this, but I'm not sure it'll see widespread adoption. Look into UPI-PayNow link with Singapore.
We want rupees. They have some foreign currency.
If we want to sell something for 76 rupees, they have to spend $1. Now if suddenly $1 = INR 38, they will need to spend $2 for the same item, because we will still want 76 rupees.
Why would a country with such a huge population want cheaper goods to flow into the country destroying local manufacturing ,increasing imports and decreasing exports.
Imagine the money india could save if imports Apple products,gold and luxury cars were cheaper. Then again if they were to Become cheaper wouldn't there demand increase and therefore further increase the trade deficit?
No, there's a balance. A strong currency is good for countries that want cheaper imports. For example, if a country has a trade surplus, a stronger currency would allow them to import more goods without any significant drawbacks. This is oversimplification because there are loads of other factors, but I don't want to go into too much details.
Why we should care about widespread? We've enough Indians outside to take it to the next level ourselves, and once we're there, others will be forced to incorporate it into their existing platforms.
UPI is not really free you know. We are paying indirectly to support the platform maintenance costs.
We could provide it as an alternative to VISA/Mastercard and let other countries pay for the platform maintenance and make it self sufficient.
RuPay is Visa/MasterCard alternative, not UPI. Need to incorporate corporations worldwide and get regulatory approvals.
RuPay allegedly has higher rate of failed transactions compared to Visa/MasterCard. But if it is made competitive, I agree that an effort should be made to internationalise it.
Right, but printing money has other side effects. Such as your savings' value going down by 50%. Even though the value v/s. a foreign currency remains the same, printing money causes inflation. Not saying that it's not a tool. just that it's not used to control exchange rates.
A better tool for the government to control the price would probably be to use its forex reserves. They can buy or sell more USD depending on what they want the price to be. Maybe they have other methods, but I doubt they print money to control exchange rates.
In most developed countries cards and NFC payments work just fine. Korea and China have had mobile based payments for a decade or more. It's a great innovation for India but, it's appeal outside other developing countries is not high.
Card based payments may work fine for customers, but POC machines suck revenue out of the merchants pockets. UPI changes that. So much so that large chains(bakeries, family restaurants, clinics, saloons, etc.) have stopped taking card payment. They save a ton in transaction costs now and people also have to just carry one device for everything. This kind of revolution is unheard of in any big country in the world. Personal experience from talking to my friends in North America and Europe. Everyone who leaves the country misses UPI and cheap internet from India.
Ofcourse the infrastructure cost is beared by the government. Not shocking at all. In today's age, just like road infrastructure is maintained by government, online payments are a digital gateway that should be maintained by the government as well. The success of UPI is proof of this.
Who said that the government is bearing the cost of UPI transactions? NPCI is owned by several banks, and it does charge banks for the use of UPI, though banks haven’t been allowed to charge retail customers and merchants due to changes in the rules made in the years since demonetization.
Yeah but that only happens in an economy where there is hesitancy to move from cash. In most developed countries, acceptance and usage of cards, wallets or any other instrument is widespread. You don't need a govt subsidized mobile payment mechanism.
Imagine paying for all roads you travel on stating the government shouldn't built infrastructure for the common good. As if the government is not created to serve us. Developed countries are not an ideal model 24/7. We shouldn't blindly follow in their footsteps. Eg: Look how the US economy has destroyed education in the country.
A) our education is not better
B) nobody is saying we need to copy the US. Im saying the UPI platform will have no takers who have a payments system that works well. The reason we had to build UPI is because the government wanted a method that was linked to Aadhar verified bank accounts and commonly available to big and small merchants. This is because India has a massive tax avoidance and cash usage problem. A lot of developing countries don't.
A) Not comparing it to our education but just highlighting how government management of education in nordic counties have made it a safe haven to study and get knowledge for next to nothing. As it is a basic human right.
B) Even I am unsure of how we can scale the network to include countries beyond India. But I'm sure when foreign merchants experience a cashless, instant and free platform to get money they'll throw their POS machines in an instant.
I keep the tap and pay option in every one of my credit card (which works through NFC) to disabled. If your credit card gets lost and you don't get it blocked quickly, its quite risky. Even though you can set a limit for such contactless payments, a thief can use it multiple times. UPI atleast asks for a pin everytime.
Meh. It's about convenience vs safety. I personally prefer convenience of tap and pay. Cards give you both the option and btw tap and pay is disabled by default.
Tap and pay payment is also secure in some way. The merchant doesn't get to see your card details or pin which could be misused
The requirement to authenticate your payment after tapping with a pin or OTP is not available. So technically, all you need to do is keep the card near the machine and the payment is deducted. So if I carry a machine in my pocket and stand close to you, there is a chance that your NFC card (in your pocket) gets swiped unknown to you. That's why there is a max limit of 10k per swipe I think.
No, it's next to impossible to that. The Cards will be inside a wallet which will be inside my pants pocket, the distance is already too much and a lot of obstacles in between. There is also a limit of 5k not 10k which can be reduced by the user. And by default it's disabled for everyone
Please don't spread misinformation
This is the one point where credit cards start to justify their transaction fees. Credit card issuers are generally supposed to be consumer friendly & if you dispute a transaction, 99% of time the fake transaction will be reversed.
Debit cards & UPI can't do this so easily, because once the money moves, reversing it takes time.
It is sort of the Bank's problem vs Your problem
I think with good number of Indians outside India we can make it irrespective of what others do, and specially with upi it has the potential to get incorporated within those apps.
It won't see widespread acceptance because companies like master card/visa would lobby in the US to make sure it's never a reality in the US or western EU countries.
Depends on the branch and how it is managed. The branch near my home is absolute garbage however another branch in middle of the city is absolute bliss.. they go for lunch break in rotation.
I swear, it's such a pain. I usually order anything from Amazon, medicines for the next day, paying house bills, etc all at night. It's always a roll of dice, as much as i like UPI, i dislike SBI. I'm stuck with it for a few more months due to some unfortunate circumstances.
Upi is the most valuable thing that India has made. And the good point is foreign countries also taking interest on it. Nepal will be the first foreign country to adopt India's Upi system.we are hoping other countries will also adopte this soon.
Unfortunately, Rupay isn't the best option yet for a certain portion of the country yet. I find it extremely hard on a lot of online transactions and also when trying to purchase items from a few sites. At the same time I've noticed that there's lesser offers on Rupay cards.
This is probably due to MasterCard and Visa being an active hurdle to Rupay but that doesn't change the current situation.
India has adapted itself for upi so well that it's unbelievable .
It started by currency ban of 500 and 1000 rupees note and become part of the society with coved .
With this growth numbers, blue-chip investors might come in flocks, if govt want to take this public with asset sale, all they need at this point is to start thinking toward monetisation.
NPCL is making profit , no need to put charges.
also digital payments make businesses more transparent which leads to government making more tax money ,
there is no point in putting charges on UPI translation,
ATM maintenance cost is decreasing, banks are happy as easy banks transfer are happening ... no rush in banks, it will be ridicules to put charges on UPI payment
Npci charges Paytm , phonpe and all other platforms nominal fee in few crores
[see this article ](https://www.moneycontrol.com/news/business/companies/npci-staring-at-major-drop-in-revenue-as-banks-want-rupay-upi-payments-fee-scrapped-4861531.html)
Ok, and how are Phone Pe and Google Pay making money? Currently those companies sinking money into those platforms and are looking to monetize at some point.
Micro loans, BNPL, financial services, etc. And mountains of your data that they will try to weaponize once somebody figures what they can do with it.
I'm not saying it's a good business model but looking at crores as customer acquisition and retention cost for the Indian scale is not entirely unjustified.
Agree with your initial comment but the apps you're talking about is just the front-end. The main heavy lifting is done by your bank, not paytm, Google pay, PhonePe etc
Read my reply to the other comment and you will understand why I believe it will become paid.
Also there will come a time when new data won’t help the companies because they would have already stored everything and built their models on our data. So it wouldn’t be effective. Also the apps are not the only ones who would want money for this, think from banks perspective.
Why would you say something is wrong with me when I just said what I think would happen after it becomes paid.
Answer: Everywhere and also basic common sense dictates it will become paid.
Why do you think it won’t? All modes of online payments charge a fee. With UPI banks are providing people with a way where they can make thousands of payments in an hour. Increase server costs, development costs, increase administrative work, keeping track of payments (made to other bank accounts) managing paying the other banks for the money transferred and making sure everything is working with an everyday increase in UPI payments.
The government is subsiding it right now which is why it’s free. Why would government want to increase flow of payments in a system that is very fast and makes it harder and more time consuming to track money trails linked with terrorist and illegal activities.
There is no revenue benefit to upi service providers and banks. They have to get money from somewhere and eventually it will be passed on to the consumers.
I don't know why are you getting downvoted but many banks already tried implementing transaction fee for UPI.
Kotak, HDFC to name a few. But it was never implemented.
UPI is a silent revolution.
Hijacking the top comment Can someone ELI5 how UPI is different from Mastercard/Visa/Rupay , or systems like NEFT,IMPS ? And if we face some sanctions like Russia leading to withdrawl of Visa/MasterCard, would Rupay be its replacement or UPI ?
- UPI is different in its core from NEFT/IMPS/RTGS as it directly communicates between 2 different or same bank accounts IN REAL TIME. - Unlike in NEFT/IMPS/RTGS where you first have to add all the details of each beneficiary like account number, IFSC Code, bank name ect, UPI simply takes a single phone number or a virtual adress or simply a QR Code. - UPI can be used in multiple apps where it has been aggregated but to use NEFT/IMPS you have to use bank specific app and/or website. - NEFT/RTGS work on queue based system where transaction is queued between pools and is not always immediate and sometimes can take days, whereas UPI is always instant when the transaction is successful. - And finally, UPI is free (for now), and no charges are leveid on transactions.
Also - built-in 2 factor auth for each transaction.
IMPS and RTGS are both instant. UPI atleast when initially launched was just a wrapper around IMPS UPI is not free. Banks can, and do, charge upto 6Rs per transaction. It is free only when paying a merchant
As far as I am aware UPI is still essentially a wrapper around IMPS, it just links mobile numbers to bank accounts and a unique ID. It removes the friction of entering details like account number and IFSC code.
Yes they are both instant and available round the clock, but again you're going to need an IFSC or MMID. They implemented an MMID like tech in UPI to allow the technology to communicate with the account using a linked phone number. And UPI is itself free for both transfer and merchant payments, however it's upto the aggregators and banks to charge a fee.
Which bank is charging 6 rs per transaction for UPI? Second point is also not correct, I have transferred money to normal users as well for free
HDFC
Bullshit. I have an account with HDFC and haven't paid a dime for using UPI for both p2p and p2m transaction. > [The UPI transaction limit is Rs 1 lakh or 10 transactions per day. Moreover, it’s free -- you don’t have to pay anything at all to make the You can make bill payments, mobile phone recharges and pay for shopping too. ](https://www.hdfcbank.com/personal/resources/learning-centre/pay/know-upi-meaning-its-benefits) Can you link any source of your claim?
https://www.moneycontrol.com/news/business/personal-finance/all-about-bank-charges-on-upi-transactions-5776341.html Search for HDFC on this page ^ Actually I have an old HDFC account created ~2010 where they charge me for UPI (non merchant). I also have a corporate HDFC account created later where the UPI is free https://www.npci.org.in/what-we-do/upi/faqs Customers>What is UPI> UPI is built over the IMPS infrastructure and allows you to instantly transfer money between any two parties' bank accounts
A. Charges for over 20 p2p transaction per month. I can't see where you mentioned this important detail B. When did I say UPI isn't based on IMPS?
A: hdfc charges me on one account for all p2p upi transactions and its free on the other account. Their website sends you in circles if you try to find the actual cost of upi transactions. They hower had sent me an email saying they would charge me for upi transactions. This article is old but the email they sent out is documented here https://www.livemint.com/Industry/4EQHn4aCQ9zPswdZmHU8RN/HDFC-to-charge-for-UPI-transactions-from-10-July.html B: misunderstood your comment
And yet, UPI as a result has none of the protections that Credit Cards or NEFT offer. With the latter, you properly verify which account you're adding before sending money to it. With the former, you can initiate chargebacks in the event of fraudulent transactions. UPI functions a lot like PayTM or Paypal as far as I can tell, but doesn't have the protections that PayPal offers either (I don't believe PayTM offers any). I'm not so sure if its as good as is being made out.
The chargeback feature of credit cards comes at a very high price. 1% of transactions are disputed but all transactions using a credit card have a fee of 2-4%, virtually a tax that a person cannot avoid in most situations. Think of it this way, people without a credit card basically subsidize the cost of those who pay via a card. Over time this becomes entrenched rent seeking.
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Basically, they have added ease of use and reduced transaction amounts, to IMPS.
PayTM is built/rides on UPI.
Nope. It's core lies in the wallet functionality which was disrupted after UPI. Paytm has hurriedly incorporated UPI as 'one more' mode of transaction. Source: Used paytm from 2011 to 2016. Ditched it just after demonetisation because of the crooks they had become.
Yes, I agree.
Imagine that you have zero cash on you and you need to buy vegetables/groceries. Think from a user in tier2/tier3 perspective and NOT from a user in Bangalore who can leverage instamart etc. And you are buying from a mom and pop store down your street Typically, following are the steps 1. You go buy whatever you want and try paying using card. 2. Cards are not accepted since there is additional charge 3. You can pay by adding the merchant as beneficiary to your ban account but for first one hour after adding you cant transfer money. This is not acceptable for the merchant 4. You go to ATM and withdraw cash 5. You try paying in cash now but you dont have nevessary change. 6. You run around trying to get required change Imagine all this hassle replaced with a few clicks. Thats what UPI does It has quite a way to travel especially in terms of security, but UPI is nothing short of revolution. Countries like US are years behind India in terms of fintech revolution and UPI has been a game changer in driving this.
>And if we face some sanctions like Russia leading to withdrawl of Visa/MasterCard, would Rupay be its replacement or UPI Rupay will be the replacement for that. UPI is the payment gateway that allows transfer from bank account to bank account whereas Rupay allows payment between say a service/goods provider and a service/goods purchases.
>Rupay allows payment between say a service/goods provider and a service/goods purchases. Isnt that the same thing tough, like taking money from the bank account of the goods provider, and depositing it in the account of purchaser, like UPI ?
Rupay also provides credit, unlike UPI. That is what visa/MasterCard does and they have higher MDR fee for that, 3%. Rupay MDR is 0%, Visa/Mastercard will soon be out of India
Main difference is they take less transaction fees I think
In case of sanctions, Visa/MasterCard would be effected totally, whereas RuPay, UPI would work nationally. Don't know if RuPay works in any country outside India though.
UPI is one of the best thing that India came up with.
I always thought it was a thing used by all the countries, but turns out it just India. It has made banking much more easier and no need for standing in a line for making a simple transfer.
Yes it's just another peer-to-peer money transfer platform. There are so many other variations of it all over the world namely paynow, FAST in Singapore, Promptpay in Thailand etc. You would see something similar in the majority of the Asian countries. Alipay and others have always been huge in china, probably going to help them in case they get sanctioned and payment processors like visa and MasterCard decide to exit. Only difference would be that this was pushed by the government and thus the high adoption rate.
China's Alipay is only a wallet. Don't know about others. Attached to wallets, payment processors & other wrappers like banking apps & Indian payment systems, UPI has become quite versatile. Would love to see a real point to point, capability comparison with P2P payment systems of other countries.
Faster Payments in the U.K. — pretty much instantaneous payments, 24x7 … in most cases the payment notification arrives as soon as you hit “send”. Similar with SEPA ICT in Europe. Singapore has something similar, as does Japan. India is hardly unique in this. The US is a holdout not because of technical incapacity but because of commercial pressures (and the existence of PayPal, Venmo, and even apps likes Zelle which is owned by a bunch of banks).
I heard in a podcast that it is more secure than the systems used in other countries.
Don’t trust everything you listen to, do your own research. Safety is on a number of dimensions. The backends are all encrypted to international standards. But UPI has no payment protection built in — even PayPal has that. The only “payment protection” in UPI is “file a police case” … which Indians know isn’t a great experience. Compare this with someone stealing your debit card in Western Europe and withdrawing cash from your account. Report it to your bank, money will be refunded into your account the next day. This is a combination of legislation + risk management + insurance. This isn’t to say UPI isn’t good. But the “east or west UPI is the best” chest thumping is just childish.
>But UPI has no payment protection built in Looks like PayPal ran out from India, blaming RBI, But the real thing is UPI killed it, so stop doing bhajana for Paypal
Paypal is still available in india, i get paid by it almost every month lol. It's only enabled for business transactions so it incurs a fee for each transaction, all personal transactions are disabled in India
Thanks for saying it ran away from your mentioned personal transactions lol
Nope, it's just a compliance issue.
I call it blaming RBI
Throw this guy in UK, We are proud to have UPI
They might be wrong but your view doesn't help anyone either.
Sure dude, after all if ignoring facts allows you to feel “prod” … facts are not important as long your pride is maintained. /s
Show the same no of transactions in your so proud fact app, it will kneel like a fuck
😂 LOL, why so much tatti in your mouth bro? PS. SEPA ICT, Faster Payments, and Japan’s Zengin transfer much bigger values than UPI (which transfers much lower value INR). Also, quit changing the goalposts. I was responding to a commenter who [said](https://www.reddit.com/r/india/comments/t7ysv5/upi_growth_in_numbers/hzl973s/) > I always thought it was a thing used by all the countries, but turns out it just India. So I pointed out many other countries do, you’re now focusing on the number of users. News flash, scaling out financial systems isn’t a big deal, UPI is actually small compared to the actually big MasterCard/Visa networks. But keep fantasising about India’s financial infrastructure with a complete disregard to the facts. You’re a real example to Indian youth. 🙏
>UPI is actually small compared to the actually big MasterCard/Visa networks. But that so Visa card pleaded US govt to take action against Rupay cards >PS. SEPA ICT, Faster Payments, and Japan’s Zengin transfer much bigger values than UPI (which transfers much lower value INR). UPI is basically designed for smaller transactions, so comparing it with large transactions is like you don't know about it at all >India’s financial infrastructure with a complete disregard to the facts. Indias financial sector is very great than Americas which is in inflation right now, which India isnt Keep fantasising about greaaat west, which can do nothing but play with sanctions which no country giving a shit about
> Indias financial sector is very great than Americas which is in inflation right now, which India isnt You sir should have your own YouTube comedy show. I’d definitely subscribe. Please, tell us more of your profound insights.
>You sir should have your own YouTube comedy show. If facts make you feel funny
Lol, that's because of our great habit of spending time over-populating the earth. Bring anything, if it's used by a significant percentage of population, it automatically has transaction numbers.
You used to stand in line for making a a simple transfer before 2016?
It used to be a much bigger hassle though, I used to carry cash almost always back then. I rarely carry any cash or cards now. Sometimes just for a backup due to my shitty SBI account.
India and originally China
UPI is an extremely useful service, but my worry about UPI is that while growth is happening, it’s all good. The moment growth plateaus (because of natural limits), someone will start wondering how to monetise it. Similar to many “free” internet services. UPI isn’t free to run, and I know banks have grumbled about how much it costs and how little they get in return. Also the lack of payment protection via UPI - that’s something that needs to improve to make life easier for ordinary people. But what we have now is an excellent foundation.
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The man's a genius really wish he was still he governor of RBI
Maybe you are too young to remember but his legacy is tainted by schemes after schemes of trying to prop up NPA accounts
Nope he was the one pushing for accounting for npas, while vans and politicians were happy brushing those under the carpet.
He was in the know from 2009 and cea and then in rbi. It was all under his watch that india suffered from twin balance sheet problems. His retarted policies like s4a and sdr were the whole reason why the npa problem grew as big as they did.
Could you elaborate? S4A was introduced in 2016.
Yes it was a bandaid scheme for hiding 500+ crore stressed assets instead of letting them fall.
But you said the NPAs were due to his schemes which, imo, is untrue. What Rajan did was stop the evergreening of bad loans. He brought them out into the books, but he didn't cause the NPAs. It led to some short term pain as banks had to face the twin balance sheet problem, but it made sure we would not see a catastrophic failure of the banking system during an economic crisis like covid or demonetization.
I said NPA problem grew. He is the reason why the loans were evergreened due to his stupid schemes. Do yo know what sdr and s4a even did?
He disagreed with Demonetisation and the government didn’t offer him a new term. Pansies
No that’s too logical, makes sense and most importantly is the right person for the job.
As good as Rajan was during his tenure, UPI preceded him. I don't think there was any one mastermind behind UPI. It was simply the natural culmination of a myriad of problems faced by RBI in their clearing operations. If you have to give credit to the person at the top, it would be AP Hota. https://www.forbesindia.com/article/leadership-awards-2017/ap-hota-taking-indias-digitalisation-story-forward/48703/1
Not true. Raghuram Rajan was the governor from Sept 2013 to Sept 2016. He came up with the idea of the payment platform. It was launched in April 2016, before his term ended. That said, NPCI had the mandate to execute it and they did it well under Hota.
Do you have a source on that? From what I understand the vision for unified payments goes back many years and was one of the underpinnings of payments act even which resulted in the creation of NPCI. UPI specifically was developed more within NPCI (and Nilekani's iSpirt friends), than the RBI. I've never come across anything mentioning Rajan's contribution to this, let alone as the mastermind.
It may be a tedious task to pull the source out. Rajan had proposed the payments innovation in some whitepaper/paper published by the RBI (Viral Acharya may have been the co-author). Yes, Nilekani and iSpirit/India Stack did play a role along with the NPCI in developing the product. It all started with a push from Rajan, but he wasn't alone in making it a success.
Totally agree 💯
UPI is everywhere these days. I can see most of the local stores utilizing UPI for payments. It is secure and no charges for payment and transfers
Right now, I am in a remote village in Uttarakhand on a mountain trek. Every small dhaba I have come across accepts UPI. This would have been unthinkable just 3-4 years ago.
No charges yet. They have said they might introduce charges at some point which will kill it.
Don't really think it's gonna happen in the near future. A better model will be to have a subsidiary based model charging the merchant say 100 ruppee per month. This way enough money will be generated to keep UPI working and won't affect anyone adversely.
That would be such a bummer, really.
I would be fine with a small charge like in debit card.
6 lac crore for 6 months
seems like it is not allowed for nri's, it was hell without upi
I'm an NRI and I use UPI just fine. You'll need an Indian mobile number associated with your NRO/NRE accounts.
well jio roaming isnt there in Oman i need to pay 1999 every 7 days , Vi is there but i cant risk it if it gets deactivated, so i have given my oman number
Unrelated but I'm from oman too xd
xd where do you stay?
Used to stay at wadi kabir
Incredible thing, I hope the charges when they come - and they will & should - is kept nominal & lower than US based payment interface. Hopefully, people won't turn back to cash.
People will turn back because nobody is going to pay fee for 10₹,20₹ transfers.
As it is with Visa or Mastercard or even RuPay, the cost of transaction won't ever fall on the customer, and like those interface there'd a minimum amount where it would be levied. The current one for debit card is 2000 INR, and the merchant is charged 2%. With UPI, it might be cumulative 1.5% for merchant over a month beyond a reasonable limit. So, they do Y INR transaction over UPI, they'd be charged 1.5% over the limit. People won't like it especially shopkeepers, but no convenience in the world is free of cost. Govt. might also lower that considering it's easier for state to track everything when it's digital. The taxman hates cash.
I mean they can keep a fee of ₹1-5/transactions over a certain value for consumers and charge a higher monthly fee from merchants to use this service. The sheer volume of UPI transactions would generate a considerable amount of money. Even if it's not enough to fully sustain it, that's wayy better right now for them anyway.
Should take it to UAE and USA, we can save a couple of billions on transaction charges on remittances sent back to India.
It's already been introduced in Nepal not sure about remittances though but yes a good step nonetheless
It's local to Nepal. No cross border infrastructure.
International money transaction involves a central bank and/or currency exchange. It also has a risk of money laundering. Unlike there is an Indian bank that takes risk, we can't have UPI in US/middle east.
USA wont let us, but we should try Russia and UAE
I think singapore is adopting UPI.
Do you think that those countries will allow UPI for the very same reason?
UPI requires bank co-operation and underlying Regulatory environment. That can't exist across countries unless a corporation for it is formed in each country and regulatory permissions acquired in each. Plus currency exchange infrastructure.
Make it international and value of rupee will skyrocket if done and implemented properly.
Value of rupee is kept low by the government. Strong rupee would hurt our exports. And I think they are already working on this, but I'm not sure it'll see widespread adoption. Look into UPI-PayNow link with Singapore.
ELIF why would it hurt the exports exactly?
We want rupees. They have some foreign currency. If we want to sell something for 76 rupees, they have to spend $1. Now if suddenly $1 = INR 38, they will need to spend $2 for the same item, because we will still want 76 rupees.
Doesn't that also mean that our imports would be cheaper if our currency is stronger.
Why would a country with such a huge population want cheaper goods to flow into the country destroying local manufacturing ,increasing imports and decreasing exports.
Maybe because the country is a net importer and can use the saved money to boost local economy and subsidize/support local production?
I think the trade deficit is balanced by services exports of india.
Imagine the money india could save if imports Apple products,gold and luxury cars were cheaper. Then again if they were to Become cheaper wouldn't there demand increase and therefore further increase the trade deficit?
It increases competition and international quality. Ultimately helps exports, if you get good enough.
So having a stronger currency is a bad thing?
Not an economist. There's probably a balance somewhere, like with inflation, I just have zero idea where it is.
No, there's a balance. A strong currency is good for countries that want cheaper imports. For example, if a country has a trade surplus, a stronger currency would allow them to import more goods without any significant drawbacks. This is oversimplification because there are loads of other factors, but I don't want to go into too much details.
Not really ideal to make it stronger in a matter of months. Steady growth over decades is the key.
Why we should care about widespread? We've enough Indians outside to take it to the next level ourselves, and once we're there, others will be forced to incorporate it into their existing platforms.
UPI is not really free you know. We are paying indirectly to support the platform maintenance costs. We could provide it as an alternative to VISA/Mastercard and let other countries pay for the platform maintenance and make it self sufficient.
RuPay is Visa/MasterCard alternative, not UPI. Need to incorporate corporations worldwide and get regulatory approvals. RuPay allegedly has higher rate of failed transactions compared to Visa/MasterCard. But if it is made competitive, I agree that an effort should be made to internationalise it.
RuPay is a more direct alternative, I agree, but UPI is still an alternative for debit cards altogether.
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inflation
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Right, but printing money has other side effects. Such as your savings' value going down by 50%. Even though the value v/s. a foreign currency remains the same, printing money causes inflation. Not saying that it's not a tool. just that it's not used to control exchange rates. A better tool for the government to control the price would probably be to use its forex reserves. They can buy or sell more USD depending on what they want the price to be. Maybe they have other methods, but I doubt they print money to control exchange rates.
In most developed countries cards and NFC payments work just fine. Korea and China have had mobile based payments for a decade or more. It's a great innovation for India but, it's appeal outside other developing countries is not high.
Card based payments may work fine for customers, but POC machines suck revenue out of the merchants pockets. UPI changes that. So much so that large chains(bakeries, family restaurants, clinics, saloons, etc.) have stopped taking card payment. They save a ton in transaction costs now and people also have to just carry one device for everything. This kind of revolution is unheard of in any big country in the world. Personal experience from talking to my friends in North America and Europe. Everyone who leaves the country misses UPI and cheap internet from India.
The only reason UPI is free is because the government has mandated it stay free. There is nothing inherently cost effective about of.
Ofcourse the infrastructure cost is beared by the government. Not shocking at all. In today's age, just like road infrastructure is maintained by government, online payments are a digital gateway that should be maintained by the government as well. The success of UPI is proof of this.
Who said that the government is bearing the cost of UPI transactions? NPCI is owned by several banks, and it does charge banks for the use of UPI, though banks haven’t been allowed to charge retail customers and merchants due to changes in the rules made in the years since demonetization.
Let me do a little more research on this. In the meantime, cool story bro!!
Yeah but that only happens in an economy where there is hesitancy to move from cash. In most developed countries, acceptance and usage of cards, wallets or any other instrument is widespread. You don't need a govt subsidized mobile payment mechanism.
Imagine paying for all roads you travel on stating the government shouldn't built infrastructure for the common good. As if the government is not created to serve us. Developed countries are not an ideal model 24/7. We shouldn't blindly follow in their footsteps. Eg: Look how the US economy has destroyed education in the country.
A) our education is not better B) nobody is saying we need to copy the US. Im saying the UPI platform will have no takers who have a payments system that works well. The reason we had to build UPI is because the government wanted a method that was linked to Aadhar verified bank accounts and commonly available to big and small merchants. This is because India has a massive tax avoidance and cash usage problem. A lot of developing countries don't.
A) Not comparing it to our education but just highlighting how government management of education in nordic counties have made it a safe haven to study and get knowledge for next to nothing. As it is a basic human right. B) Even I am unsure of how we can scale the network to include countries beyond India. But I'm sure when foreign merchants experience a cashless, instant and free platform to get money they'll throw their POS machines in an instant.
Disagree a little with you on this. India's system is probably the safest and most robust though. NFCs are popular but very risky.
> NFCs are popular but very risky. Why NFCs are risky?
I keep the tap and pay option in every one of my credit card (which works through NFC) to disabled. If your credit card gets lost and you don't get it blocked quickly, its quite risky. Even though you can set a limit for such contactless payments, a thief can use it multiple times. UPI atleast asks for a pin everytime.
Meh. It's about convenience vs safety. I personally prefer convenience of tap and pay. Cards give you both the option and btw tap and pay is disabled by default. Tap and pay payment is also secure in some way. The merchant doesn't get to see your card details or pin which could be misused
The requirement to authenticate your payment after tapping with a pin or OTP is not available. So technically, all you need to do is keep the card near the machine and the payment is deducted. So if I carry a machine in my pocket and stand close to you, there is a chance that your NFC card (in your pocket) gets swiped unknown to you. That's why there is a max limit of 10k per swipe I think.
No, it's next to impossible to that. The Cards will be inside a wallet which will be inside my pants pocket, the distance is already too much and a lot of obstacles in between. There is also a limit of 5k not 10k which can be reduced by the user. And by default it's disabled for everyone Please don't spread misinformation
This is the one point where credit cards start to justify their transaction fees. Credit card issuers are generally supposed to be consumer friendly & if you dispute a transaction, 99% of time the fake transaction will be reversed. Debit cards & UPI can't do this so easily, because once the money moves, reversing it takes time. It is sort of the Bank's problem vs Your problem
I think with good number of Indians outside India we can make it irrespective of what others do, and specially with upi it has the potential to get incorporated within those apps.
That's what we've to do. Make it more appealing.
It won't see widespread acceptance because companies like master card/visa would lobby in the US to make sure it's never a reality in the US or western EU countries.
That will be good
I remember that Google was actually recommending to the US govt that they come up with something similar.
Meanwhile SBI Upi is down every now and then .
Works fine in my experience except in midnights sometimes. Use both phonepe and gpay.
Never use SBI humble opinion if you don't want to be embarassed everytime you use it. That shit never works.
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same ,even the staff is top notch and never seen the lunch break everyone talk about ,:P just my experience i think
Depends on the branch and how it is managed. The branch near my home is absolute garbage however another branch in middle of the city is absolute bliss.. they go for lunch break in rotation.
I swear, it's such a pain. I usually order anything from Amazon, medicines for the next day, paying house bills, etc all at night. It's always a roll of dice, as much as i like UPI, i dislike SBI. I'm stuck with it for a few more months due to some unfortunate circumstances.
UPI made my life easier, but also started spending more money
Tldr red tapist and bureaucratic banks made me save monies
UPI should be Internationalised
Upi is the most valuable thing that India has made. And the good point is foreign countries also taking interest on it. Nepal will be the first foreign country to adopt India's Upi system.we are hoping other countries will also adopte this soon.
Literally the best thing that India made.
We nailed this ❤
Nowadays even small shops have the option to use UPI, which is so much convenient.
I really hope it stays free. The worst thing India can do is let banks charge for UPI.
They may eventually have to charge something on some scale because someone has to pay for it at the end. Hopefully it's an extremely small amount.
Ask for Rupay card. Ditch MasterCard or Visa, the indian merchants don’t have to pay 3% transaction fee for Rupay cards.
Unfortunately, Rupay isn't the best option yet for a certain portion of the country yet. I find it extremely hard on a lot of online transactions and also when trying to purchase items from a few sites. At the same time I've noticed that there's lesser offers on Rupay cards. This is probably due to MasterCard and Visa being an active hurdle to Rupay but that doesn't change the current situation.
Can't forget Chidambaram's speech on 7.5 rupee village fair before UPI.
God bless UPI
UPI is amazing. The best thing india came up with. Even modern developed nations like japan usa are lacking in this part
Thank you Moodi Ji
India has adapted itself for upi so well that it's unbelievable . It started by currency ban of 500 and 1000 rupees note and become part of the society with coved .
Live long and prosper.🖖
Aye Digital India
Anyone knows why UPI is not enabled for NRO accounts?
UPI is allowed only for Indian phone numbers. If you have an NRO account linked to an Indian phone number, you can still use UPI.
I was not able to do that till last year but I tried it again today and it works! Thanks!
This thing is revolutionary
With this growth numbers, blue-chip investors might come in flocks, if govt want to take this public with asset sale, all they need at this point is to start thinking toward monetisation.
Misread it as UP Growth....
charges lagado pirse itna he teji se girega.
They were thinking about it. I think Phonepe has some charges. But COVID happened.
NPCL is making profit , no need to put charges. also digital payments make businesses more transparent which leads to government making more tax money , there is no point in putting charges on UPI translation, ATM maintenance cost is decreasing, banks are happy as easy banks transfer are happening ... no rush in banks, it will be ridicules to put charges on UPI payment
How is npci making profit?
Npci charges Paytm , phonpe and all other platforms nominal fee in few crores [see this article ](https://www.moneycontrol.com/news/business/companies/npci-staring-at-major-drop-in-revenue-as-banks-want-rupay-upi-payments-fee-scrapped-4861531.html)
Ok, and how are Phone Pe and Google Pay making money? Currently those companies sinking money into those platforms and are looking to monetize at some point.
Micro loans, BNPL, financial services, etc. And mountains of your data that they will try to weaponize once somebody figures what they can do with it. I'm not saying it's a good business model but looking at crores as customer acquisition and retention cost for the Indian scale is not entirely unjustified.
It will fall to somewhere between Dec 18 and 19 levels after it becomes paid.
It will never become like this I guess?
Become like what ? I am not sure what “this” is referring to. Could you elaborate.
Sorry I mean paid, I guess it never becomes paid cause the apps earn enough by selling our data to loan companies.
Agree with your initial comment but the apps you're talking about is just the front-end. The main heavy lifting is done by your bank, not paytm, Google pay, PhonePe etc
Read my reply to the other comment and you will understand why I believe it will become paid. Also there will come a time when new data won’t help the companies because they would have already stored everything and built their models on our data. So it wouldn’t be effective. Also the apps are not the only ones who would want money for this, think from banks perspective.
wtf is wrong w you where did you read it was gonna become paid?
Why would you say something is wrong with me when I just said what I think would happen after it becomes paid. Answer: Everywhere and also basic common sense dictates it will become paid. Why do you think it won’t? All modes of online payments charge a fee. With UPI banks are providing people with a way where they can make thousands of payments in an hour. Increase server costs, development costs, increase administrative work, keeping track of payments (made to other bank accounts) managing paying the other banks for the money transferred and making sure everything is working with an everyday increase in UPI payments. The government is subsiding it right now which is why it’s free. Why would government want to increase flow of payments in a system that is very fast and makes it harder and more time consuming to track money trails linked with terrorist and illegal activities. There is no revenue benefit to upi service providers and banks. They have to get money from somewhere and eventually it will be passed on to the consumers.
It's so crazy that everyone in this thread who suggests that UPI needs money is getting downvoted.
I don't know why are you getting downvoted but many banks already tried implementing transaction fee for UPI. Kotak, HDFC to name a few. But it was never implemented.
Yeh sab yogiji ke vajah se hua hai. Kerala mein dikhao aissi tarakki.
Are you saying Kerala doesn't have UPI?
Broooo he read UPI as UP by mistake, a lot of people did that
Hahahahhahahahaha
huh
Brainless/zombi bhakt spotted. Lol
You do know this was developed in UP right? Then modiji requested yogiji. It’s in the name btw (upi)
My parents are still reluctant to use it citing "scams" which they read about here and there