from Hacker News

Why peer to peer digital payment system UPI should remain free in India

by pvsukale3 on 9/13/22, 8:43 AM with 41 comments

  • by deepakshenoy on 9/13/22, 1:12 PM

    Thanks very much! I would love to hear your comments.

    I think UPI is incredible and well loved because it's free - putting a toll on something moving at this insane speed is just going to slow it down tremendously.

  • by mandis on 9/13/22, 2:09 PM

    Is UPI one of the rare times when a government organization has created an innovative technology that works for a scale of 100 Million+ users?

  • by 2Gkashmiri on 9/13/22, 12:42 PM

    absolutely. i am a professional who deals with businesses and i have seen how UPI has immensely helped reduce dependency on cash...

    i use it everyday. right now UPI is mandated to be mobile phone based, it has to keep the registered SIM card at all times, you cannot change your phone, cannot have a single account on muliple places, you dont have account portability but those are all technical issues.

    Because of an actual recession, the government is finding new ways of collecting taxes, recently they put GST or a tax on paid public toilets. So, everytime you pay to use a paid toilet, you are giving 18% tax on that transaction. That is the level of "tax hounding" the government has resorted to.

    i fully agree with the author here, i would even suggest, all the private players like google pay/phone pe who have their own apps built on top of UPI network should be made to pay-to-play because they are definitely earning because of cross-selling/upselling/advertising.

    google/amazon wants to float a new UPI app, heck even trucaller has one so why should they not have an interest free bank deposit to pay for the infrastructure. they would continue to earn by up selling etc anyways and the network would continue to get funds to run.

  • by hackpert on 9/13/22, 2:11 PM

    UPI's penetration in (urban and semi-urban anyway) India is honestly incredible. I worked with/on the tech when it was very nascent in 2016 and in 2022, on visiting India after a long time I was stunned to see _everyone_ has a little PayTM QR code card. Vegetable vendors, taxi drivers, roadside hawkers, small business owners. It's brilliant because the system is banking the traditionally unbanked, and generating tremendous amounts of data that can hopefully be put to good use by economists, honestly unlike any other system in the world. Even MPesa in Africa has stupidly high withdrawal and transaction fees, which UPI doesn't need at all.

  • by spaceman_2020 on 9/13/22, 4:30 PM

    UPI is amazing. And its quickly spreading everywhere.

    I was on a week long vacation in Goa and literally did not have to use cash even once. Right from local stores to restaurants to kayak rentals, everyone accepts UPI.

    Not a single transaction failed. Not a single transaction lagged.

  • by sudhirj on 9/13/22, 4:05 PM

    A lakh is 100,000 and a crore is 10 million, or 10,000,000.

    In India, the next order of magnitude after 10,000 is one lakh (hundred thousand) and a crore is a hundred lakhs (100 x 100,000 or 10M).

  • by e3bc54b2 on 9/13/22, 12:49 PM

    Good god this is a great article!

    Starting from TLDR at top, it is well reasoned, well sourced and very detailed.

    And I agree, UPI should remain free, precisely to allow the vibrant ecosystem and innovation formed around it. Banks nowhere are known to be nice guys, even TFA gives multiple examples when they were dicks until forced down, and its no good idea why they should get paid for UPI transactions when they are already turning out profit from it.

  • by osrec on 9/13/22, 2:47 PM

    For anyone looking to get a better handle on the numbers, INR 10 cr is approximately GBP 1 million.

  • by perryizgr8 on 9/14/22, 2:23 AM

    I was on the fence on this issue, but this article has convinced me that UPI needs to remain free. At least if the goal is a society that relies less on cash.

  • by null0pointer on 9/14/22, 1:03 AM

    UPI doesn't seem to be peer to peer at all.

  • by MichaelZuo on 9/13/22, 4:34 PM

    Cmd+F to find ‘liability’ and the word only appears once in the very bottom disclaimer explaining that the author does not accept ‘liability’ for anything written.

    I guess the topic of who has liability for this financial system, and the cost of that liability, is too unimportant to be worth mentioning?

    e.g. In case of a breach of personal information, transaction records, etc., who would be held responsible?