from Hacker News

UPI Payments: 10B transactions a month done, next stop 100B

by TriNetra on 9/3/23, 5:02 AM with 385 comments

  • by Brajeshwar on 9/3/23, 11:02 AM

    I’ve been using UPI since its very early days when it used to fail quite often. UPI is still one of the best things to happen in the financial scene in India. However, these days, personally, I’m trying to reduce it to either known people, or established institutions. I wish there is another layer of tokenization when one pays via UPI, like how Apple Pay does. I wish that the transaction is obfuscated and the phone numbers and/or UPI ID are hidden.

    You pay for a nice hot cup of ₹10 Chai on the streets but then you got a phone call later on - naively to upsell something, or the next step up, trying to scam you. Unlike me, my wife continues to pick up every incoming phone calls. We have had enough calls from people whom she paid via UPI trying to sell or this/that and what not.

    There is a scam going on in India. Random females, who are either naked or scantily clothed, will call up on WhatsApp Video. If you pick up the call, say while in the bathroom and not fully clothed, they will take screenshots and threaten you that they will make that picture “viral” to extort money. I won't be surprised if there is an under-belly of phone numbers and other data being sold that were collected via UPI payment transactions.

    Cash is still OK at the tea-stalls, the random shop, etc. Well, when I just wanted to have a simple Bombay’s cutting-chai but the chai-guy wants my phone number, and everything else -- I'm not comfortable with that.

  • by davelondon on 9/3/23, 9:02 AM

    I was in India earlier this year, and found there was no way (and I spent hours trying) for a foreigner to get access to the UPI system. This meant:

    1) There were some cashless fast food outlets that I couldn't eat at

    2) There was no way for me to book an intercity bus ticket

    I eventually managed to get a bus ticket by sweet-talking someone in a shop to use their personal UPI account in exchange for cash.

    I fear there's going to be more problems like this for travellers as communities go cashless around the world.

  • by db1234 on 9/3/23, 6:13 AM

    The most incredible thing about UPI is how it was embraced by even the poorest in the remote corners of India. One of the former finance ministers of India talked in a dismissive tone in the parliament about rural India adopting digital payments when the current government announced "Digital India" plan. Some one made a meme video out of it mocking him.

    https://www.youtube.com/watch?v=aCnv8gwN0ug

    Another video showing the ingenuity of a road side vendor https://www.youtube.com/watch?v=uY2156ecRDQ

  • by mehulagrawal on 9/3/23, 6:36 AM

    That's >50% of monthly global Visa transactions [1].

    Monthly volume at ~$190 billion [2], as compared to ~$1 trillion monthly volume for Visa globally [3].

    Pretty good, given that most banks have daily UPI limits of $1200, and much lower individual transaction limits.

    [1] https://www.thenationalnews.com/business/technology/2023/07/...

    [2] https://www.cnbctv18.com/technology/upi-monthly-transaction-...

    [3] https://annualreport.visa.com/financials/default.aspx

  • by bayesianbot on 9/3/23, 6:18 AM

    Thailand has a similar system - you use your banking app to scan a QR code, either the code is generated and has the amount included or it's printed static paper and you write the amount yourself, then show the receipt to the merchant or they check the notification in their phone. Started in 2017, nowadays it's everywhere, I can go to local market and pay $0.5 products with it. My 12 year old daughter opened her own account as well and didn't need my help, only installed an app and went to ATM that has a special slot for ID card to verify identity. Quite convenient as no need to carry cash anymore.

  • by dang on 9/3/23, 7:22 AM

    Related. Others?

    A digital payments revolution in India - https://news.ycombinator.com/item?id=36011978 - May 2023 (165 comments)

    Tiny, cheap smart speakers unlocked the rise of digital payments in India - https://news.ycombinator.com/item?id=35440608 - April 2023 (142 comments)

    Why peer to peer digital payment system UPI should remain free in India - https://news.ycombinator.com/item?id=32821955 - Sept 2022 (41 comments)

    India leaps ahead on payments - https://news.ycombinator.com/item?id=31970992 - July 2022 (4 comments)

    UPI: India's Unified Payments Interface - https://news.ycombinator.com/item?id=24094323 - Aug 2020 (178 comments)

  • by sidcool on 9/3/23, 6:04 AM

    The scale of UPI payments is unprecedented. Perhaps the best payment system in the world by far. My friends who come from US are always awe struck by the pervasiveness and easy of use of UPI payments. They want it so bad in the West!

  • by me551ah on 9/3/23, 8:32 AM

    The major difference between UPI payments and Credit Cards is that there is no 'surcharge'. This is what makes it very viable for small merchants to accept payments of minimal amounts.

  • by sirius87 on 9/3/23, 8:33 AM

    The next leg of growth for UPI is already underway with the inclusion of RuPay credit cards under UPI. Until last year, UPI transactions would directly hit your bank account balance and flood your bank statement with many small purchase entries.

    Linking a RuPay [1] credit card to a UPI app provider such as Google Pay in India allows users to pay through their credit card [2].

    This will in turn boost transaction volume on India's indigenous RuPay payment network, and it will probably show its impact on Visa and Mastercard.

    [1] https://en.wikipedia.org/wiki/RuPay

    [2] https://www.livemint.com/news/india/google-pay-brings-rupay-...

  • by tacocataco on 9/3/23, 9:43 AM

    I really really don't care what cash transfer app we go with, I just want to only have one app and for it to NEVER change.

    Ideally, there would be regulated advisarial integration between the apps. That way if you had venmo and they had cashapp, it would still work!

    Let these companies compete on UX and financial instruments, not creating a walled garden of users and hoping they get the most inertia.

    We made it work with phone networks, I think we could handle this.

  • by SpacePortKnight on 9/3/23, 9:08 AM

    India's largest denomination banknote is now just Rs. 500 or $6 after their recent ban on the Rs. 2000 notes. Thus, online payment becomes the only way to transfer any meaningful amount.

  • by colesantiago on 9/3/23, 7:39 AM

    UPI is one of the best payment systems invented and in under 10 years has more transactions, use cases and ease of use than cryptocurrencies which is clearly terrible for payments.

    This shows that UPI has the potential to scale beyond India yet crypto cannot scale at all.

  • by omeysalvi on 9/3/23, 7:38 AM

    UPI payments used to be a little hit or miss a few years ago but they have been almost flawless for me over the last year. Apps have matured and show a warning if the recipient or self network is down rather than initiating a transaction that might never complete. The only roadblock now is to figure out a way to handle large volume days such as new years when the network is overwhelmed at night.

  • by albert_e on 9/3/23, 6:41 AM

    All positives are accepted.

    Concerns --

    - Cronies of government have captured the technology stack making themselves key players that can control and monetize this space.

    - Traceability of all petty transactions -- enabling building of super rich profile of individuals / orgs -- ripe with potential for misuse.

    - Leaving a trail of your PII like name / UPI ID (which in some cases is your mobilenumber@upiprovider) / last few digits of bank account number etc with all random people you transact with -- like taking a rikshaw ride or buying potatoes in a street-side vegetable market. (99.9% of these are harmless -- but the small fraction can invite intrusion / enable harassment)

    - Over enthusiastic adoption of digital payments to the exclusion of other options forcing people to use apps. And the newer payment mechanisms -- opening newer avenues for scamming the less savvy / elderly / vulnerable.

    - Pushing this change to people rather than letting the benefits and convenience naturally lead to adoption -- after the flaws are slowly uncovered and fixed through early adoption by savvy people (see Demonetization of 2016)

    - This blind worship of technology as a silver bullet that cannot be criticized (or you are labelled a foreign-sponsored detractor / anti-national / india-hater whatever) extends more broadly into adjacent areas like the Aadhaar national ID system, linking of it to all spheres of citizen services from birth to death including voting rights and banking.

  • by laurels-marts on 9/3/23, 8:26 AM

    I this something like iDeal in Netherlands for online payments or Apple Pay for physical payments?

    How does it compare to both?

  • by ChrisArchitect on 9/3/23, 6:53 AM

    For the uninformed, is this like the Interac system in Canada?

  • by shivz45 on 9/3/23, 9:11 AM

  • by jimsimmons on 9/3/23, 6:24 AM

    The day after demonetisation was announced every news paper in India carried a front page ad with the PM batting for Chinese backed PayTM.

    The UPI revolution happened despite Modi, not because of him in the slightest.

  • by porkbeer on 9/3/23, 6:28 PM

    When you ban cash to control your populace, of coure an alternative becomes essential. Hardly worth celebrating our peicemeal subjugation.

  • by igetspam on 9/3/23, 12:09 PM

    That's a lot of messages moving around. Kafka?

  • by SolomonLijo on 9/3/23, 1:25 PM

    I think UPI is one of the best decisions in the financial sector of India and w/ better infrastructure, it can do a lot more!

  • by ufodktztd on 9/3/23, 7:52 AM

    better title is, they have 10B of citizen relationship data. the same data you get off you sum up visa and Facebook and Google and Verizon.

    nobody gets the scale of this data.

    visa and mc see the writing on the wall. that's why they raise rates earlier this week. it's their last breath on the markets they still hold.

  • by ETH_start on 9/3/23, 6:29 AM

    Many countries have a single dominant privately owned e-cash system. The only alternative to a future with centralized financial systems, where the individual's right to transact won't be at the total mercy of the whims of forces they don't control (e.g. a corporation which deems their credit risk as unacceptably high, a political zeitgeist that deems their unwillingness to get vaccinated as making them deserving financial isolation, an authoritarian regime deeming their political outspokenness as too great a threat to their power, etc) is the ascendance of a permissionless decentralized financial system using a ledger with distributed consensus, like the public blockchain.

  • by avl999 on 9/3/23, 5:03 PM

    I was recently in India a few weeks ago for a friend's wedding. I am not an Indian national/citizen/whatever and my experience related to anything tech and money was absolute awful (esp the obsession with OTPs)

    * The problems start as soon as you land at the airport. I land at the Delhi airport, my friend has sent a driver to pick me up and gave me his contact info. I try to connect to Airport wifi and bam it's asking me for an Indian number to text an OTP to connect to the public WiFi. Why is having an indian number at the Delhi INTERNATIONAL AIRPORT an expectation? What do they expect foreign travelers to do? Ridiculous. Luckily I found someone and asked to use their phone to whatsapp the driver and figure out where he was.

    * Foreign credit cards are hit and miss. I have 2 credit cards, I let my bank know I would be traveling and I still could not reliably use them, they worked maybe a fraction of the time. Apparently Indian government added some "security" requirements earlier this year to "prevent fraud" that ices out a large number of foreign cards at many payment tills. This essentially makes India a cash-only economy for foreign tourists.

    * If you try to use your foreign cards while shopping, many places will ask to send an OTP to your (indian) number even for relatively small amount of money involved, and again as a foreigner you are out of luck.

    * Since I can't use my cards reliably, I am now forced to carry around cash. Worse... the highest denomination available is 500 rupeees, which is equivalent to about $6. This means that if you are planning on doing any type of shopping as a foreigner you have to carry a fat wad of cash on your person the entire time. I intended to do some shopping, eating out and drinking which meant I had to carry around 20,000 ruppees at all times, which was neither comfortably due to how fat that wad of cash is, not relaxing as I am constantly worried about losing it.

    * I finally decided to get an Indian phone number to get around all the OTP nonsense and get some data while walking around. And bam to get an Indian sim card you need an indian ID or as a foreigner go through an application process involving a bunch of documentation (and not trivial documentation, requirements like a picture that matches the exact dimensions accepted by them) and it's not a quick process. Red tape upon red tape to get a sim card for normal usage! Thankfully, someone helped me out with a SIM card they purchased via their govt ID and gave it to me saving me the pain.

    * The pain doesn't end here. After I get my sim card, I realize I need to buy a bit more data. Easy enough I think in my head... there's even an app from the provider! I pick the upgraded plan and try to buy via my credit card and boom, international credit cards are not accepted for e-transactions. I literally just want to give them the equivalent of $10 to get an additional 25 gigs of data and I can't do it online. Again, I asked someone to buy it for me and paid them in cash.

    * Then I wanted to buy a friend a gift that is only available on Amazon. The red tape strikes, apparently as of this year Amazon India can no longer accept foreign credit cards as methods of payment due to "security and anti-fraud requirements" by the indian govt. Again, I have to find someone to buy it for me from Amazon using their card and pay them cash for it.

    The bad is that everything is so needlessly complicated and red-tapey for foreigners. Things that should be trivial are hard.

    The good is that you can always find someone to help you circumvent the red-tape by paying them cash :).