UPI Payments: 10B transactions a month done, next stop 100B
bqprime.com
bqprime.com
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.
If they refuse to give an invoice, tell them you’ll report them for GST evasion. [2]
[1]: https://www.onmanorama.com/news/india/2023/02/13/rajeev-chan...
[2]: https://theprint.in/economy/govt-launches-gst-reward-scheme-...
This will hide your phone number.
Eg: My UPI id is sudshekhar.cheq@trans.
Most other UPI apps allow you to create such handles AFAIK.
Nowadays, you can also keep your bank details private by using UPI with a wallet instead of savings account.
Banks / UPI vendors have to comply with very strict data regulations and the confirmation of a "data leak" is enough to attract heavy penalties from the NPCI and RBI. Most banks and UPI service providers will never risk it, specially post the DEPA guidelines which have recently been adopted.
Using Cheq, you can keep your bank account plus mobile number secret. Everyday small value transactions can also be consolidated separately from your main bank account.
I don't think anyone is selling data in the UPI ecosystem but if they are, that's a very short-sighted strategy to make money for sure.
UPI payments also ~~leak~~ share the person’s full legal name on transactions…and the phone number.
[1]: https://scroll.in/article/1045536/are-your-upi-payments-farm...
Legal Name -> Yes, everyone gets to see your full name post scanning the UPI payment app.
But this is a feature not a bug. Since in most cases I want to confirm the identity of the person I am paying to.
And allowing people to display any name as their UPI username will lead to much more identity fraud than you can imagine.
This is baffling. First, how much % of the day do you spend naked? 1-2%? So the success rate of any given call is going to be 1-2% at most, given that otherwise theres nothing scandalous to post. Second, do people just instinctively accept video calls, while they're naked? That seems very unlikely to me.
One day, he picked up a WhatsApp Video, where the woman on the other end was pretty much naked. Father-in-law was in the couch and gave the phone to my wife, asking who is on the other end. After some verbal exchanges to stop calling us; a barrage of WhatsApp message began -- screenshots of a semi naked women and father-in-law on a video chat.
I ignored the first time wife complained. By the 3rd, or so message, I called up a friend to give them a casual call and let them know who he was. Yeah! This whole scamming to get people's picture in phone screenshots getting "viral" seems to be a common scam in India.
You wanna try a sure-shot scam/Spam game right now?
1. Register a domain in India or via an Indian registrar, I will guarantee you that in the next few days to weeks, you will get all the needed spam in your inbox associated with that domain registration. If you have given your phone number, then they will call up there too.
2. Register a company. Baam! Phone calls, emails, and the very famous Book Parcel scam via the post office to the registered address, and what not.
Have fun. India is definitely not for beginners. /wink
I think that works everywhere, not just in India. I'm getting spam to my Estonian company's and my Russian sole proprietorship's email addresses at least every week.
Some of them purport to help you “start your business”. They will charge you money and provide about zero value. They are not trying to help anyone at all, they are just looking to exploit inexperienced people.
And the worst ones will use wording to make themselves seem like this is another required step in order to complete the creation of your company. All the while being very careful so that although the wording tricks other people they can still snake their way out of trouble by pointing to some part or the message they sent that somehow clears them of any way to get them fined or otherwise punished for actual fraud.
This was already a problem years ago when I registered my own sole proprietorship. I am sure that today with the ease of generating convincing garbage using LLMs the problem is probably even greater.
Since they send these notices by mail, there will be a disclosure in it somewhere, otherwise it would be mail fraud which is a rather serious federal crime.
The naked video chat scam, when it was new, was mostly banking on victim wanting to keep it secret or wanting to go away. Once of somebody shows up, that shame is gone; and beating ensues.
Yes, Photoshop happens, simple clothed people face gets plastered of fake screenshots.
There are plenty of other scams going on. Like international caller will call and say your son/daughter/relative is on trouble (hospital, police, accident) amd pay right now to get him saved from that said trouble.
Or caller will say that I will send you X amount of money to safe keep, but pay x/100 now to get X across.
And many.
OP didn't mention it explicitly, however, chatting with a scantily clad person on the other end can be used as blackmail material too no matter what state of dress you are in.
1. Bringing a mic and camera equipped device to the bathroom.
2. Accepting video calls from naked people.
3. Acting ashamed for having a naked person on screen.
I tried to make a joke because the premise sounds crazy and extremely hypocritical to me.
And while many of us don’t by habit take video calls from strangers when we are disrobed, at scale in India it’s sure to happen.
Not sure what is this about.
Everyone pays using QR Code. No personal information like phone numbers are passed on to the merchant.
I mostly just use it my grocery store and vegetable store or in those no-change situations. Yet, in the last week alone I have blocked at least 3 WhatsApp chats from unknown numbers about offers, business deals, one even very friendly female hi.
Now I know from where
[1]: https://scroll.in/article/1045536/are-your-upi-payments-farm...
Instant PLONK.
But I have been hearing raves about how great it is, from my Indian friends.
Is that possible with UPI? Or even a dual sim? I'm not sure if the account is tied to the person or the number.
This should have been obvious in retrospect. Call spam is India's biggest export.
EDIT: we kind of solved this problem in Brazil (PIX is similar do UPI, predates it in fact), as the user can opt to user other identifiers, or even generate a random GUID-like identifier.
PIX was announced in 2019, UPI was launched in 2016.
You can create a Private UPI ID it's supported on PayTM. Your phone number is not revealed when you send / receive payments.
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.
Surely nothing can go wrong.
> drivers license
A driver's license is rarely accepted as a valid ID document outside of the US which rarely has anything better.
In Blr/Mumbai/Delhi, our team can arrange for home verifications as well.
https://inc42.com/buzz/japan-may-join-the-growing-list-of-co...
If you have guidance on how to setup Google Pay/other with UPI it would be appreciated. I even tried updating my Google Pay software to get the Indian version in the hope it would work.
UPI is great and I hope it becomes worldwide. I think they started in France recently. If you are an Indian citizen/OCI holder encourage your foreign banks to get involved. I do not have much hope for Canadian oligopoly banks but if a bank in the US got it I would move some of my money there.
Booking bus tickets - RedBus and other portals accept credit cards. To use cash one must book at the terminal.
never been to India. do they not support credit cards like the rest of the planet? visa/mastercard/amex? only UPI?
The world is not the US and the US isn't the world.
most of the developed world does. even Eastern Europe have transformed themselves into a NFC bonanza.
> The Netherlands
the netherlands is the wrong example. it has always been an outlier when it comes to card payments. case in point: you can't even make a Visa/Mastercard payment in an AH supermarket, you need a Maestro card.
> The world is not the US and the US isn't the world.
i have travelled quite a bit. most the of the developed world (except for the Netherlands of course) has full support for Visa/Mastercard NFC. and Amex support is more and more spread (e.g. i have seen more and more Stripe in Greece lately). the world is moving on from the idea you have of it.
The are many developed and developing countries that operate their own card networks, peer-to-peer payment technologies, and generally cheaper faster alternatives to Mastercard/Visa, with many merchants preferring them to their U.S. counterparts.
Visa/Mastercard may have dominance in the English speaking west, and many tourists location for the English speaking west, but assuming Visa/Mastercard is some gold standard the world should aspire to is very naïve. In reality alternatives like UPI and other peer-to-peer systems are more likely to be the payment systems of the future. Continued Mastercard/Visa dominance in its current form only really makes sense in countries with outdated and inadequate banking infrastructure, like the U.S.
i find that very hard to believe as the user interaction for qr codes is a step backwards from using an nfc with a phone’s wallet. and once you use the nfc solution it’s very hard to switch back to a system that is less friendly.
of course, if you take the QR codes out of the equation and replace with NFC then i see no issues.
> Continued Mastercard/Visa dominance in its current form only really makes sense in countries with outdated and inadequate banking infrastructure, like the U.S.
you are wrong. if anything the system is getting more widely used. europe for example has very advanced banking infra and is all in on nfc, with mastercard/visa/amex widely accepted, and the system is being adopted everywhere.
There’s no reason p2p payments can’t operate over NFC. It’s just a short distance communication technology, it’s little more than an implementation detail in a payment network, and not significant to fundamental operation or economics of a payment network.
The fact Mastercard/Visa have a monopoly on NFC payments on phones is a big reason why the EU is investigating ApplePay and Apple NFC API restrictions.
> you are wrong. if anything the system is getting more widely used. europe for example has very advanced banking infra and is all in on nfc
I don’t think you appreciate the timeline here. Contactless payments have existed in Europe for over a decade, it basically at peak adoption already. Alternative P2P payments and technology like OpenBanking is only just getting started, and Mastercard/Visa are already worried, they’ve already made big acquisitions in Open Banking tech and alternative payment networks to ensure they don’t get cut out of the profits long term.
Ultimately payment technologies are chosen by merchants, not customers. If alternatives offer cheaper payments, and more importantly, faster merchant settlement, then merchants are going to start exploring those options. If companies like Apple are forced to open up their NFC stacks, and let others build alternative wallet and payment networks on them, then Mastercard/Visa current technical advantage will disappear very quickly.
That very advanced banking infra you speak off will forms the backbone of alternative payment technologies, why would anyone want to pay a middleman for a service their bank can provide directly, and provide much cheaper?
Visitors can show up and immediately pay for things with ease, for one.
Even the GBV Transport network lets you use NFC cards directly, without having to buy a separate card or ticket. You get a charge 6 days later after they tally up your trips.
I like UPI, but paying with NFC Cards is so much simpler, easier, and faster.
India does have the infrastructure and accepts credit cards but it's not available everywhere and UPI is more widespread in India. It can be found in street side sellers to massive retail stores. While the street side sellers won't have the methods to accept credit cards, massive stores probably will and there are always ATMs so cash is a thing. For travel we have Uber, and Uber accepts credit cards. so, You don't need UPI but it's a great convenience to have. On the other hand, Not having Internet access after you get out of the airport is definitely a problem.
My Dutch Maestro debit card worked in all shops and cafés I visited, and online I was usually able to use a MasterCard.
Personnummer was really only required for things like phone plans and store loyalty cards, which you don’t really need. I just used EU roaming on my Dutch SIM, but if you’re non-EU I believe you can get PAYG/prepaid SIMs without needing a personnummer.
https://www.swedbank.se/en/private/cards-and-payment/debit-c...
https://www.handelsbanken.se/en/personal/accounts-cards-and-...
https://www.nordea.se/privat/produkter/kreditkort-bankkort/n...
But regardless of those more niche issues, did you try joining a Gym before getting a Swedish card/personnummer?
Swedbank -> issues Maestro, https://www.swedbank.se/privat/kort/bankkort/bankkort-maestr... (yes, the English page lists only a quarter of the available ones)
Handelsbanken -> issues Maestro, scroll down a bit
I was there a few year ago with both Mastercard and Visa in my pocket and the success rate was 60-70% for that combination (i.e. some one third of the places would not accept either). But steadily improving.
1. If you are from one of G20 countries (for now, will expand to other countries), you can get a prepaid UPI digital wallet at the airport where you land. Just go to the money exchange counters and enquire about this. Airport information desk should help you as well. You don't need an India phone number or India bank account. You can load money into this prepaid wallet via your foreign account or credit card etc. You can use your passport as document for KYC purposes. This is most convenient for short visits. The UPI app issued will be by some forex company. When you leave India, whatever Rupee balance in the app will be refunded to you at the airport. The UPI apps that are most popular with Indians (GPay, PhonePe, PayTM) won't work for this.
2. If you are not from G20 or you are going to be in India for longer than a week, you are likely to get a local phone number. You can get a local prepaid phone number sim at the airport. Then, you can open a bank account in India, tied to that phone number. This account type is called NRO Rupee account – Non Resident Ordinary account. This entire process of opening an NRO account can be done at a bank branch physically or online via your mobile phone. Once you have that bank account, you can use any UPI app like any Indian does.
See:
1. https://www.indiafilings.com/learn/opening-bank-account-indi...
2) opening an account isn’t practical for tourists, but of course if you’re living in India for even a short while, it’s worth it.
3) Allegedly UPI will work for NRIs / OCIs with foreign phone numbers. In reality most banks haven’t implemented it yet.
tl;dr - “onboarding” onto UPI for short-term visitors is mired in burdensome bureaucracy, and this isn’t a technical issue with UPI, it’s a result of conscious choices by Indian regulators.
The real win would be if you could load up a UPI wallet like you’d do with PayPal. Perhaps initially restricted to people with a valid visa. But regulators haven’t figured that out yet.
For example
https://www.linkedin.com/feed/update/urn:li:activity:7094460...
Is there a page which lists others like this?
https://www.npci.org.in/what-we-do/upi/ppi-apps
These two links list all the approved UPI apps in the Indian fintech market. As you can see, the ecosystem is vibrant and ever-growing :)
We are the first ones to focus exclusively on serving foreigners and NRIs in India and have issued the most number of international wallets till date.
Fave app and First Rupi(from IDFC) are alternatives you can try if interested.
Awesome! I look forward to trying out your app!
(Side-tracking from payments to SIMs : ) Several historic buildings had an online-only ticket process with a QR code displayed outside. The user experience of the websites was variable (navigating the forms and input widgets on a phone while standing in the street could be trying), and they required a lot of information, eg. Passport number and sometimes home address, usually including authentication via one time password sent to mobile phone number and possibly they only work for Indian SIMs. Those sites accepted credit card payment, including international. I couldn't count the number of times I gave my phone number, for all sorts of purposes, e.g. when checking in my phone at a temple, I was photographed and gave my number - simple id and method for finding the phone among all the others (when I realised that I switched the phone back on). And for all of these a local phone number is required, so pick up a local SIM at the airport or in the city. I did both, and I think the airport process was quicker. They do require full id for SIMs, including a local address, e.g. a hotel. A 28-day SIM cost only 299 rupees so I got a second one for increased coverage and capacity, because the networks are over-subscribed. (That's less than the daily rate at home). A dual-SIM phone makes that easy, and I could also run with one local SIM and my home SIM to receive SMSs. I was able to download maps and apps while travelling on buses and trains, and use tracking apps - which helped with knowing when a bus was approaching my stop.
People can get themselves verified for the Cheq wallet at any of these locations.
You'll just have to enter the transaction PIN (which you decide while creating the account).
Sim binding generally fails because the individual is unable to send an sms due to recharge/network issues. Can you raise a ticket with the support team? Someone will quickly get in touch and help you onboard.
These money exchange counters are before airport security and accessible without "entering" the airport.
Your meta-point though is “oh there’s a workaround” or “if you go through hoops it’s doable”.
My meta-point is, the whole “do it at specific shops in the airport” is problematic and needlessly limiting.
Why an airport? Why’s it special? Could it be more convenient?
Asking these questions of digital systems (any digital system) is what HN is about. Not defending needless limitations.
> moreover UPI needs no defending, its stats speak for itself.
The law of large numbers applies to UPI like it does to almost everything in India: you’ll get huge numbers which look good on slides.
In reality, UPI is a bit above 10% of India’s cash transaction volume, so yeah, the reality of “UPI is ubiquitous” isn’t quite there yet.
And “UPI needs no defending” is the exact uncritical thinking I expect when there’s any forum discussion of UPI. The thread started with people saying UPI doesn’t work for tourists & short term visitors, which I believe is valid criticism.
There are many other criticisms of UPI, including and especially the governance around it. (On a more optimistic note, all of this is fixable.) But that’s for you to figure out if you’re interested!
[1] https://www.ycombinator.com/launches/JDX-cheq-upi-digital-pa...
Don't make unnecessary personal attacks by saying there's no critical thinking. If there's a specific factual thing that's incorrect in what I wrote above, feel free to point it out with evidence. Don't make unnecessary tall and broad claims about others who you know nothing about.
Btw, I didn't say UPI doesn't need improving. I actually worked on different parts of UPI stack to do exactly that. And if you take the time to look at the number of feature launches that have happened on UPI you will realize how much work to improve it is actually happening every month. Also, if you really leave your biases aside and look at it critically, you might realize that the scale of UPI wasn't a given just because it is India. It takes effort make anything get to that scale and keep growing.
Expecting incoming international passengers to queue up at a solitary shop (and hope that it’s staffed) in an airport arrivals zone, before they exit the airport secure area, isn’t helpful or convenient or “digital”. Because passengers after long flights often just want to exit the airport and get to a comfortable bed. Or even otherwise are prone to making mistakes.
Also, I’ve actually seen the kiosks in two airports unmanned and lying empty (to be fair, early morning arrivals). So even a motivated passenger is not guaranteed to receive service if they arrive at an odd time. So when I say your advice is not helpful, yes, it’s with personal experience.
The apps (one of them funded by YC) are a great alternative to this “line up at a particular spot” madness, and hopefully they’ll improve and become more streamlined over time.
PS. If you say “xx doesn’t need defending its stats speak for itself” you will sound uncritical whether you intend to or not. It’s a classic “shut down debate” line. Perhaps appropriate at the Arnab Goswami school of debate, but out of place elsewhere.
If you use it, are called out, and then see it as a personal attack, that’s unfortunate — certainly not my intention to attack you “personally”, but you’ll need to think about your words too.
The whole system is built around phone numbers. It puts the end of the chain of trust in the hands of the corner store vendor not accepting a fake photocopy of an ID to swap SIMs. It’s ko different than when South Korea mandated ActiveX for browser security for banks.
Let’s not even get started on the whole Unique Identification Authority (UIDAI) joke. India doesn’t have Apple Pay because it’s illegal to have device-local biometrics - you must store it and verify it with the government.
UPI is also an extremely shortsighted system throwing away any semblance of privacy for the population. The whole thing doesn’t have fees partly because sharing every bit of transaction data with 7+ parties in every transaction is how it is funded.
UPI is a great system for Indians, but it is still hostile to anybody visiting without an Indian identity document. India's reliance on SMS for OTP codes is also super bad imo. There is no need to be defensive about UPI. It's good, but it can always be better.
> You can get a local prepaid phone number sim at the airport.
Worth noting, do all this before you leave the airport. Assuming you land in Delhi, once you leave the airport there's no way to get back in unless you have flight information to show
This turned into a pretty big problem for me on my first trip to India once I exited the airport with no way to make phone calls, no data, no sense of where anything was, and no rupees (I hadn't exchanged cash yet)
Online method is not possible since banks and other providers insist on providing Aadhaar number and completing OTP authentication for that mode. Aadhaar is a number given for residents, i.e., anyone who has legally resides in the country for more than 182 days. So a foreigner landing in the country isn’t going to be eligible for it until six months have passed.
2) I wouldn't advise visiting foreigners to get a sim as it requires passing your passport scans to untrustworthy low-level staff at the cell companies. It worries me how they take the passport to a backroom to scan it. I worry they're selling/distributing copies. I realize hotel staff also scan passports but they have reputations to protect and are less likely to. Google Fi/T-mobile roaming or an e-sim via Airolo are much more appropriate and wise choices for short term travelers. If you know somebody in India however, asking for a SIM is totally fine. You can pay to add funds via an international service like Xoom or an American Express card in the Airtel app (which worked for me occasionally)
Protip about American Express cards in India, and the reason I mention it several times. I lost mine last time I was visiting and they sent a new one to my hotel in under 48 hours.
Sudhanshu here, from Cheq UPI.
We're a part of YC S23 and our team launched the Cheq UPI payments app specifically to help international citizens and NRIs avail UPI.
Some testimonials from our early customers: https://www.youtube.com/watch?v=4Ct5WY9vOz4
We launched officially in August, and are growing fast. Next time you travel to india, do give us a try :)
PS: We don't need an Indian bank account to help you make payments.
We're trying to stay away from unsustainable economics
1) Cheq charges a 10$ joining fees to everyone who activates their wallet.
2) We'll eventually charge an add money markup for topping up your wallet using an international card
You can always stick to cash and card as your preferred mode of payments in India.
Having a UPI wallet can be a convenient backup for travellers though. You won't have to run around finding an ATM in case you get stuck.
And the verification process might seem "difficult" but its one-time and less painful than visiting a doctor.
Given the applicable forex regulations, I guess that's the best we're allowed to enable right now.
In contrast, in Japan, they may have NFC payments by card/phone, online payments, but every single bus/train/cab/boat accepts cash as the lowest common denominator. Forget payments, all public offices still support paper + post for all procedures I've had to do, with the option of doing things with a phone or a PC. In India, however, for several things I've had to do, they would rip out the old system and replace it with a online portal with dubious implementation, and often disregarding laws (for example using UID number as legal identity proof, while it shouldn't have been, by law).
https://www.youtube.com/watch?v=aCnv8gwN0ug
Another video showing the ingenuity of a road side vendor https://www.youtube.com/watch?v=uY2156ecRDQ
That timeline doesn't make sense. UPI was already a spectacular success by 2019.
I'm amazed by their recent 5G coverage in the country too. Getting unlimited 1gbps in a lot of tier 2 and 3 cities at $3.5 a month. Unbelievable
Even if you subtract all the margins corporations (visa/mastercard etc) extract there is a gigantic bill when you make services free for everyone.
Everything is beautiful when google, youtube, fb, twitter offered their stuff for free. But we know the true cost 20 years later.
Sooner or later some one has to foot the bill. In this case a very small pool of indian tax payers.
UPI is free for #1. It costs #2, #3, #4 to build and operate the systems. So, #5 pays for accepting payments in UPI. But what they pay is far less than what it costs them to accept payments via other means including cash. Also, #2 pays somewhat because it is a service their customer values. Banks also like it because the network fees are far cheaper than other networks like Mastercard and Visa.
Naively someone might think paying and accepting in cash is free. But reality is cash handling can get expensive – leakages (cashier steals), counting and tallying cash, time lost in going to bank branch to deposit cash, dealing with providing exact change etc. are all expensive once you see how convenient and highly productive digital payments is.
Then, demonetization and covid were accelerants to achieve critical mass. Post 2022, its been unstoppable.
Related - https://restofworld.org/2023/india-sound-boxes-paytm-phonepe...
These speakers automatically read out any credit into the account.
Even a vendor who can’t read can use UPI to reliably receive payments.
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-...
Hi there! We've noticed an increase of fast food purchases in the log of your account. Therefore your medical insurance premiums have risen by 200% to accomodate the change. For lessened prices, you might want to start consuming our Healthy Food(TM) lunch packs by EvilCorp, made out of bugs for the good of the environment :)I assume these apps don't provide such an option.
In 2016, India demonetized bills as low as 500 Rupees (the equivalent of $6). People died in the ensuing chaos, and the Supreme Court just that ruled in favor of the demonetisation.
* The person has a choice whether to consume fast food regularly. It’s their freedom, yes, but they should also accept the costs that come with their lifestyle choices. Similarly, if someone chooses to regularly drive at a daredevil speed, they should pay a higher premium.
* This is different than discrimination based on involuntary characteristics. If someone is born with genetic predisposition to get cancer, or happens to grow up in a city with high carcinogen level, it’s arguably a lot less fair to charge them extras.
Is the above question rhetorical or do you lean more libertarian?
The amount of privilege in asking this question is just shocking. As if people can so easily choose where they live. Try telling miners and nomadic construction workers that.
Might as well abolish it and let everyone pay for their medical bills on their own. Which would be actually more fair than paying a "unhealthy food premium" - since you're only paying for actually getting sick, not for the prediction of whatever model the insurance company is using to predict your sickness.
I fear and loathe the future in which statistical models (of sickness, crime, etc.) determine the course of my life. I'd much rather be held responsible for my own actions and accept whatever randomness of the universe throws at me, than be a puppet of some huge statistical model created to maximize megacorporations' profits.
If all your neighbors play extreme sports or drive drunk all the time, would you like to pay the same premium as they do in the same insurance pool?
It’s an established practice for insurance companies to use statistics to charge a higher premium for some groups, eg young male drivers, even if many in such a group have a safe lifestyle. If they use a finer grained model, then it’s more fair to people who make a safer life choice.
The profits are largely orthogonal to whether they use a coarse or fine grained statistical model, but more about the level of competition in a given market. Over time, companies using a fairer model might win over the competition, all else being equal.
Yes, because choosing otherwise opens the door to discrimination based on many factors, many of which can be completely out of our control.
What if you're working a job with a non-insignificant risk of danger - should your premiums be higher? After all, you chose to work in that profession and to put the last 20 years of your life specializing in it. You should've just chosen differently...
What if you're living in a neighborhood with a high crime rate - should your premiums be higher? After all, you chose to inherit the house and live there and put the last 20 years of your life building a home and a social network there. You should've just chosen differently...
What if you're shortsighted which makes you more of a danger in traffic - should your premiums be higher? Maybe you didn't choose to be shortsighted, but you could change it with a laser surgery or whatever, and afterall, we're just following the model...
What if you're black - should your premiums be higher? Maybe you didn't choose to be black, but statistics show that black people are significantly more at risk of being victims of violent crime. And after all, we're not being racist, we're just follow the model...
Et cetera.
If you allow insurance companies to discriminate, eventually, everyone who isn't following the "safe path" will be discriminated against. At that point, the insurance stops being merely an amortization of unpredictable cost, and becomes a tool to control the population.
Also, since it will all be managed by the same insurance vendor, then they can negotiate better prices in the market and make the system more efficient. Of course this will have to be highly regulated in order to make it fair. We could ensure this by having the major policies be managed by officials who are accountable to the public via a voucher system -- if the official makes bad decisions they get a 'no confidence voucher' and someone else who wants the job will get a shot at it.
This system would be far from perfect, but it would probably be better than paying corporations to run it when they are incentivized to provide only enough service to meet market and legal requirements and pocket the rest -- while showing shareholders consistent profit increases, which can't be tenable.
Yes, someone living in a high risk of car break-ins should pay more for auto insurance.
Yes, someone living in a low-lying area next to the beach in a place known for hurricanes should pay more for flood insurance than someone living in Colorado.
What we shouldn't do is charge people more for being of a certain race or gender.
I have no problem with people getting a discount on health insurance if they wear a continuous blood monitor and show that they only eat metabolically healthy foods that don't spike their insulin and glucose levels.
I have no problem with people getting a discount on health insurance if they wear a fitness tracker and show that they get their 30 minutes a day of exercise.
> Yes, someone living in a high risk of car break-ins should pay more for auto insurance.
> Yes, someone living in a low-lying area next to the beach in a place known for hurricanes should pay more for flood insurance than someone living in Colorado.
> What we shouldn't do is charge people more for being of a certain race or gender.
That's a very convenient way to contrast, but where do we draw the line?
For example, should people with genetic diseases pay more? If yes, then how is that different from discriminating race or gender (which are also part of genetics and may affect the risks)? And if not - then why not? Is the reasoning consistent with all the other scenarios you've listed?
Regardless, even if we did agree on a line in the sand, then insurance itself becomes just a class-based amortizer. Rich, fit, genetically lucky people in good neighbors collectively pay less, while the poor, unfit, genetically unlucky people in bad neighbors collectively pay more. Then you might as well not have insurance at all.
There was a time when being fit required having more money, but that is increasingly not the case. You don't need to shop at Whole Foods to eat well anymore (Aldi and Trader Joes and Grocery Outlet all carry healthy foods these days).
So being born in a particular place, having your history, your inheritance and most of your social connections in it, it's all just an arbitrary choice?
> occupation
Again, having an option to work in a certain career that brings you enough money to live and feed off your family, that's just an arbitrary choice, too?
What about STDs? They may make you more prone to illnesses. You may say "well, the person has voluntarily chosen to have unprotected sex", but then what about rape victims? Should insurance companies be informed of such private details of people's lives in order to weight out whether the condition is "chosen" or not? And who the hell decides what's "chosen" and what's not?
All I'm trying to say, it's not black and white. You can't just decide to count the "things you choose" and discard "things you don't choose" as most things don't fall cleanly in those two categories, location and occupation being just one of many examples of the gray area in that continuum. And once you go down the path of price discrimination based on anything, you're on a slippery slope towards thought police.
i'm scared of people that think like this. all digital transactions enables such people to mandate these ideas - the road to hell with their good intentions.
The law in South Africa says that short-term health insurers can't charge different people different premiums, so this is an 'add-on cashback scheme'.
They integrate with 2 big supermarket chains: when you pay with a credit card issued by the insurer's banking partner, your discounts are automatically processed on a line-by-line product level. They also integrate with a fast food chain in the same way, Nandos, and give you a discount for selecting the 'healthier' food choices on the menu.
[1] https://www.discovery.co.za/vitality/help-healthyfood-health...
absolutely nobody wants to be like us, sa or au (with brexited uk following close). those are dystopian.
also credit cards will very much NOT share your information. we have decades of privacy laws on them. that's why you have to "join" those programs. it's very much NOT the norm. and decent countries have laws against this "70% fake discount"
Sorry for being pedantic, but charging "bad customers" $XXX and charging everyone $XXX more, whilst giving everyone but "bad customer" $XXX back, are equivalent.
It's advancing a lot quicker than you'd expect given that many of the countries aren't really that good at coordinating with each other.
Further, NFC is usually the first to be left out when manufacturers cut costs to hit lucrative price points.
Apple never implemented host card emulation (HCE) as an API, but that doesn't matter as these payment systems usually aren't backed by a payment card network, thus they'd have to build needlessly complex reconcilliation systems when transactions already debit directly from accounts, and offline usage isn't considered a major use-case.
In the payment processing sphere, we are stuck with a duopoly that charges insane fees for something that was very complex and labor intensive 50 years ago. But today - if we could start from scratch - the entire payment volume of EU can be processed on a well provisioned computing rack with a software written in less than a year by a small team. It could be offered by ECB as a free service, with strong privacy guarantees written in EU law.
Entire modes of fraud, such as credit card cloning, would cease to exist. Online payments - seamless, safe, and instantaneous, just scan a QR code.
But we cannot start from scratch because the incumbent is good enough and the rent they extract from each member of society is small enough to not motivate them to initiate a switch, even if the aggregate rent is a staggering amount that would be recouped in days of the new system going online.
Someone can just stick a QR code on top of the office one. [1]
[1]: https://www.straitstimes.com/tech/can-i-trust-this-qr-code-c...
* find physical card or virtual in an app
* copy paste or insert "secret" numbers, and trust the website won't save them, because they are static
* insert a bunch of personal data which the merchant has no real reason to know, but that is used for "fraud detection" because they don't trust you are the real owner of the "secret" static password
* go back to your phone and get the SMS/3dsecure validation prompt, because it turns out your bank also doesn't trust the secrecy of the "secret" numbers they issued you
* finally, pray to the cave gods the transaction has gone trough the complex duct tape and bubble gum contraption, is not flagged for review or reversed by the various intermediaries etc.
Also, the payment system should not be confused with the banking system. Complete control over the payment system would give the attacker the ability to deny payments or make fraudulent ones, but would not, for example, allow the attacker access to accounts not linked to a payment instrument, or allow them to circumvent the limits set on such instruments.
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)
The government aggressively manages the system to prevent any single company from getting too much weight and forces them to address scams or other system occurs in almost real time by the threat of being thrown off the rails.
It’s actually shocking that only a few years ago RBI was concerned about concentration risk of having NPCI (the platform operator of UPI) and invited proposals from banks and companies for NUE (New Umbrella Entity) licenses. Then something changed and it canceled all those proposals.
NPCI has a monopoly on instant fund transfers (leaving aside the RBI run RTGS). NPCI wants to limit concentration risk among its clients by trying to push for lower market share among competitors within its platform, like Google Pay or WhatsApp Pay.
As for scams, there are plenty of them on UPI every single day, and there’s no way to get any fraudulently transferred funds back without filing a police complaint and waiting for them to do their jobs (and greasing their palms depending on the amount for the job to be done).
And most UPI are linked with phone number, so you can also pay via phone number if UPI is linked with it.
it's literally one of the least secure things you can have.
I guess in Europe there is just much less demand for systems like this because NFC terminals are you ubiquitous.
But calling it the "best payment system in the world"! And west wants it so bad sounds like blind exaggerations.
United States is not the only western country. Scandinavian countries has Swish (2012), Vipps (2013), and Mobile pay (2015), Canada has Interac.
Most growth in payments is either new markets or markets that grow a lot, but not completion of rather mature markets (and additional services).
1: You follow a link on your phone that opens the app, you're prompted with the transaction sum and then sign with a code on the phone and done.
2: You scan a QR code (from sign or screen), opens a prompt in app for the sum, sign and done
3: Person-to-person, you enter their phone number(often from the phone book), amount and message, sign and done.
The signing is done via the standard app that's also used to login to the tax-office,etc so the entire population has it.
1. A 100x higher volume on a normal day.
2. A highly effective and equitable system that somehow managed to succeed in one of the most corrupt and beauracratic nations.
3. The majority of its users can barely read, if at all. Not to mention all the languages involved.
UPI is impressive because it actually made a difference in the lives of the poor. Probably the first piece of internet technology to have a measurable effect on the lives of hundreds of millions of people.
So yeah the case sounds rested in my perspective.
EDIT: also sounds like Swish charges a fee to the banks? Sounds a bit outrageous for a payment system trying to be the best in the world to charge a fee.
FWIW, NPCI charges all banks for UPI too. They’ve been eating most of those costs because the government didn’t allow them to charge (now those charges are slowly coming in). Banks haven’t been happy with the zero MDR regime for UPI.
Doesn’t apply for transactions less than ₹2000 ($24 usd). Might sound like a small amount but most Indian transactions won’t cross that. And the fee doesn’t apply to p2p anyway.
Nr 2 though is something that I think might be a reverse though, looking globally mobile payments seems to have been a hit in markets with less well functioning traditional money and credit/debit card markets.
In Sweden cards's (most often debit) with tap-to-pay still rules for most b2c cases like established restaurants, stores and anything with slightly higher value. Swish was mostly started out to facilitate non-commercial person-to-person cases but has now displaced most lower value cash usage (person to person, small vendors, temporary venues).
I frankly don't even know if I have physical money in my wallet anymore since.. well I've not used physical money in a couple of years now iirc.
In US NFC is best and seamless since most people have high end phones. In India maybe UPI with QR code is better solution since you only need phone with a camera.
UPI is directly connected to your bank account. It does not go through VISA, Mastercard or whatever.
In my experience paying with credit is a fire and forget action, since the money is debited automatically at the end of the month, with no interest. The UX is great, since it only takes a card swipe [as long as I have the funds to pay it back and I'm within my credit limit].
In an scenario where you are not debited right away, I agree completely. But I would only expect that to happen by accident or if the user lacks the financial literacy to understand there are better ways to buy whatever they want. I may be missing some financial corner cases.
what debt?
> UPI is directly connected to your bank account.
oh, then it's a hard pass from me. i do not connect anything to my bank account and keep cards in separate banks for security.
You are taking debt whenever you use credit card. If you miss/forget payment, some tech fault or sometimes just because you can be charged hefty interest or charges.
You can keep a separate account for your daily transactions.
most people i know have debit cards.
You can have other (non credit, say savings) bank accounts for security too. It's just as easy (or easier) as getting a credit card here (in India).
i understand where the confusion comes from. i use the term “credit card” generically for debit and credit cards. sorry for the confusion.
No, because after a month, there will be an automatic payment from my bank for the balance. In that time, the bank is giving me their money and they’re on the hook for any fraud.
This is technically incorrect. UPI is connected to NPCI, which runs the platform and charges the participating banks for this service. Same for RuPay cards by NPCI.
With credit card, it isn't my money for a month until I have to make the payment. If there is a problem, I can chargeback. The possibility of chargeback makes the vendor's support more helpful
Then again, I don’t see much need for that when I can just NFC pretty much everywhere (of course the merchant still ends up paying up to 1% on every transaction)
So until there is some standardised comparison probably making any statements about merits or demerits, including mine are just opinions without facts.
However, I've spent a lot of time studying the payments space (7+ years now!) and I'll quickly give you 3 reasons why UPI is "better" than Interrac for example :
1) Better User Experience
Systems like Interrac enable instant bank to bank transfers. However, they don't allow for third party applications to initiate payment requests / view balances. Customers are restricted to choosing a bank and sticking with the user experience defined by the bankers.
UPI , on the other hand, mandates banks to accept and honor payment requests generated from "Third-party payment application providers (TPAPs)"
This allows for a much larger variety of payment experiences to be designed, which can be "fit on top" of the existing banking layer.
PSD2 regulations, in Europe tried to achieve this effect, however most banks ended up implementing a custom version of the protocol instead of adoption a common standard.
2) Lower costs
Adoption of the UPI payments system has massively reduced the cost of sending money anywhere across India.
For Indian banks, the cost of sending money via UPI is wayy less than the "Gas fees" required to facilitate crypto transactions or the fees charged by VISA/MC networks to facilitate transactions.
Similarly, costs for a merchant to accept UPI payments are much lesser than accepting any other form of digital payment today (in India and maybe the world).
3) Federated Architecture
From Day-1, the UPI ecosystem has been design to support multiple switch providers, payment institutions and local regulations.
If countries like France, adopt UPI, they won't have to depend on centralized servers hosted in India to run their payments technology.
All their data can be hosted in servers within the country and the UPI instance facilitating French transactions can be tailored to honor local regulations and limits.
This flexibility is not as easy to implement with older payment systems (like VISA/MC).
--------------------
Much of this can also be attributed to the fact that the other payment systems were developed 15+ years ago.
The recently launched, FedNow system adopts a similar approach to UPI. Will be interesting to see how it evolves
I think the main takeaway is that phones and capable app ecosystems was a "hidden" disruption enabler vis-a-vis the traditional credit card processing companies that various actors in various countries has taken advantage of now, the big question is if/when they will make this internationally interoperable (considering the trouble foreigners in Sweden has with being excluded from these "easy" payments that at best requires a card or at worst cash it's an area that needs fixing).
Still for those involved they wouldn't probably care too much as long as there isn't real-time reporting to the police to get events shut down (although with laxer laws in that area that'll probably fade as an concern).
Haven't needed my checkbook in many years now, almost everywhere has tap-to-pay and the rare place which doesn't has a chip reader.
I don’t need to open another account, fumble with one-more-app or anything. Also apple-pay appears to mask my CC/DC number as well, so better safety.
I want it everywhere badly in west as well as east and middle(-east).
I am familiar with UPI and few similar things in other neighbouring countries(looks like every SEA country has its own entirely different version of it and some country has almost 4-6 competing copy-cats!).
Then again, we don't really the regulation framework for making me feel like cell phones are a safe way to move money around. (Because I have trust issues with tech.)
It's already there.
With the exception of the US, almost every country I've traveled to in the Middle East, Asia, and Europe has tap-pay enabled. The Middle East has virtually everyone paying with their phones via NFC. In India Apple Pay doesn't work but when I travel there I can use my phone every time. NFC cards are also the norm.
i don’t think so. in the UK NFC payments via the phone’s wallet are ubiquitous.
> I suspect at some future point UPI (non-wallet) transactions will be charged a small fee and wallet transactions will not.
Right now, it is other way round. Wallet transactions above ₹2000 attract some fees for merchants.
https://scroll.in/article/1045536/are-your-upi-payments-farm...
(note: these paragraphs are not juxtaposed)
> “All these parties get a slice of the transaction data,” Lakhsmanan said. “This is built into the UPI system, which works on the model of ‘data maximisation’ – collecting and sharing as much data as possible.”
> The amount of data shared on the digital spending habits of consumers is significantly more in UPI as compared to traditional forms of digital transactions. “In a card payment system, such as credit cards, there are fewer parties,” Lakshmanan explained. “Further, the data stored is not identifiable, since it stores credit card numbers, that too in a redacted fashion.”
> But since this is not happening, companies may have to resort to other ways to make money. Said Jonnalagadda, “The lack of merchant discount rate [charges for processing debit and credit card payments] is a disincentive to all middle parties in the transaction – banks and apps, so they are forced to cope by upselling other services or collecting data and looking for data monetisation opportunities.”
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-...
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.
but it's use case is tiny in most of the world. most payments aren't made to people you want to give money to. most payments actually go to sellers. as such what people use in developed countries is their credit card.
This shows that UPI has the potential to scale beyond India yet crypto cannot scale at all.
The fiat monetary system is itself just made up of a large number of centralized banking systems which have probably issued more units than they claim/believe. But the critical difference from private payment systems is that because the banking systems are treated as the sources of truth to represent the national currency, they can never run out of units. The way this problem will manifest itself is probably through inflation as the banks will have all these new currency units being created out of thin air due to thousands of different system flaws or exploits across thousands of different systems... These counterfeited digital units will be accepted as payment just like legitimate digital units; there will be no way to tell the difference as all the banks inherently trust each other (see correspondent banking). Essentially, fraudsters will control much of the new money minted by various centralized systems which will give them a lot of power in the markets.
The reason why crypto is important is that it's publicly auditable and cannot be counterfeited (neither accidentally nor intentionally). I believe that eventually, most economic participants will not be able to get a hold of the national fiat currency no matter how hard they work or how valuable their work is but some other people will have no difficulty getting hold of that fiat currency and they won't work at all (they won't need to). This contrast is going to be the catalyst that causes people to move to crypto as it will cause hyperinflation due to large fiat holders being unproductive members of society and crypto holders being comparatively productive.
Even MPesa has more usage than crypto has in more countries since it was launched around the same time that Bitcoin was released.
Even with all of this, cryptocurrencies such as Bitcoin having sluggish transactions per second causes those to just use centralised systems such as UPI.
Those in crypto circles keep heralding the phrase 'banking the unbanked' but it seems that those people in 'unbanked' countries have built a better system than crypto was intending to solve in under 10 years.
It stands to question crypto's relevance in the first place as a means for payments (not speculation which it is mostly used for)
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.
How is that any different to what Visa and Mastercard can do? Speaking for myself, *every* purchase I make now, no matter how petty, is made with credit or debit-cards which go through their payment networks. The only exceptions are my house' landscaping (still uses paper cheques), buying weed (all my local dispensaries in WA are cash-only due to the federal bank embargo on the legal cannabis industry), or personal transfers over Zelle/PayPal/Venmo - so I'm sure Mr. Mastercard has compiled quite the dossier on me by now.
I think the hidden value of UPI is that it makes doing business easier which is of huge value. People sitting on money has never helped any economy…especially at the level that UPI operates - ie enabling petty spending greases the wheels of the economy and lifts people out of poverty.
For example, say I want to buy coconut water on a hot day. Earlier, I’d go without if I didn’t have change. Now I use UPI. I benefit from fresh coconut water. The seller benefits from my money going to his bank account.
Even GWB told people to go shopping after 9/11 so that the wheels of the economy would keep churning.
It’s the stuff that was above the bottom of Maslow’s needs pyramid that UPI has enabled.
The lack of "petty spending" is not the reason India has a poverty problem.
Therefore, anything which loosens the purse strings should lead to more business activity.
More business activity will lead to better resource allocation and hiring, more auxiliary services cropping up to support novel needs.
All this will lead to fewer poor people.
Now, reverse the arrow. If it were to become harder and harder to spend money, more and more people would fall into poverty.
Not really, when you make a payment using credit or debit cards, your name doesn’t go to the merchant (and doesn’t have to, since you can enter any name online when entering card details). Your phone number also doesn’t go to the merchant from the card number unless you decide to share it. In the case of UPI, the receiver gets the full name and many a times the phone number of the sender since that’s the most common UPI identifier.
For the longest time, certain professionals such as doctors running neighborhood clinics earned money only in cash, allowing them to skip the tax net or claim to tax agencies that they attend to many patients on a charitable basis. This is changing quickly with patients walking into clinics insisting on paying digitally, pushing doctors to open current accounts and have billing and payment systems.
How does it compare to both?
You can also setup mandates (autopay) for recurring subscriptions like Netfix. Unlike Credit Cards, you can even bypass the merchant and directly cancel an autopay through a UPI payment app.
UPI requires a bank account, a mobile phone number linked to the bank account and a smartphone to transfer funds for anything other than a trivially small payment (tiny payments are now supported on feature phones).
There are plans in place to charge a 1.1% fee for transactions to merchants. The indian government claims that there will be savings via banks handling less cash but it provided exactly zero in the way of calculations, estimates or data. In 2022, the indian digital payment industry expected a net loss of around 60 million USD.
If and when it's charged then then you can say it's not free. Until then people should stop parroting lies. Really what a stupid statement!.
The UPI revolution happened despite Modi, not because of him in the slightest.
The goal of demonetisation has never been clear. It was a thuglaq move and Indian right wing has retro fitted motivations to it.
He wasn't. This was PayTM making hay when the sun shone. And obviously glorifying the Dear Leader has its benefits.
1 - In many cases for my Dad, it had failed due to poor internet in the area.
2 - I heard from an article that a lot of merchants in Mumbai do not accept them.
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.
Since this thread is about an article celebrating UPI's 10B transactions/month: That means between 4133 (28 days/month) and 3733 (31 days/month) transactions per second on average.
Bitcoin is at 7 transactions per second.
The bitcoin blockchain takes ~500GB these days. At UPI's transaction volume, it'd take 250TB by now, replicated at various sites.
Whatever you think of blockchain, it has some serious work ahead.
This article is nearly two years old, but provides a good overview of the latest techniques devised for achieving scalability in public blockchains:
https://polynya.medium.com/rollups-data-availability-layers-...
Since then, layer 2s (which are the principal execution layer of the modular blockchain stack the article above expounds upon) have seen exponential growth in adoption, and mounting innovations bringing them progressively closer to their theoretical potential of 100,000 transactions per second:
Also, the blatant scam nature of them is a bit of a problem.
While there's a lot of hype, the Washington Post already printed the truth in 2015 https://www.washingtonpost.com/news/wonk/wp/2015/06/08/bitco... which an economy professor have nicely expanded on in two blog posts https://ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin-pon... https://www.ic.unicamp.br/~stolfi/bitcoin/2021-01-16-yes-pon...
Put another way, there is nothing inherently scammy in using a distributed blockchain to record balances, and cryptography to authenticate updates to the balances. While opening the door to financial contracts to every one in the world with a computing device may make scam offerings more common, it's overly simplistic and lazy to resort to a caricature of crypto tokens being, as a rule, scams.
Articles like the ones you linked above want a return to serfdom, under the control of officialdom. There is no other conceivable reason why someone would not want people to have at least the option of taking custody over their own money, in a form more useful than physical cash.
In long lived immutable digital systems, guess what, that doesn't exist.
Talk to your actual scientist cousins, crypto-graphers.
If we're at the "totalitarian government" stage, "easily readable immutable data source" is EXACTLY what they'd dream of.
In any case, anonymity is a gradient. It's a question of how much resources a state has to expend to track a user, and that value can be increased with better privacy technology, so that the state has to eschew broad-based restrictions on mutually voluntary interactions and focus its investigative resources on only the most dangerous actors, who engage in genuinely predatory behavior (murderers, thieves, etc).
https://davidgerard.co.uk/blockchain/2018/04/05/debunking-bu...
> Ordinary person: “Your weird Internet money sucks to use. It’s slow and expensive. I lost my coins by mistake and it can’t be fixed. If I get hacked it can’t be fixed either.”
> Bitcoin advocate: “But everyone wants [list of ideological aims held only by weird people]! Everyone I know, anyway.”
But in specifics, censorship resistance? I just read that in an article.
https://www.wired.co.uk/article/sex-workers-crypto-failing-t...
> “You get on an exchange for as long as you can, until they shut your ass down,” says Knox. “You quickly [run out of exchanges], so you sit on a lot of useless money. The whole ‘crypto is permissionless and censorship-resistant’ thing is a bunch of bullshit.”
All your sophistry aside that is.
Please read the responses and don't encourage flame wars.
> The only fundamental difference inherent to the respective designs of blockchains and traditional banking, is censorship resistance through genuine self-custody.
Then this is nonsense. The fundamental difference between the two is that one deals with real money while the other does not.
It’s just people have limited amount of time in a day, and caring that government X can trace their transaction is waste of time. Also, in the last 3 years of lawsuits, we’ve kind of seen how crypto payments are traceable as well if someone really wants to find the source.
Second, it is politically and generally legally easier to prohibit a class of interactions involving a subset of the population (e.g. those who refused to be vaccinated against COVID) by way of prohibiting intermediaries from interacting with them. So for instance, restaurants were prohibited from serving the unvaccinated in many jurisdictions, but the unvaccinated were not prohibited from patronizing restaurants. The authoritarian policy was easier to enforce like this, because the direct target was commercial establishments, which is a smaller group whom the population at large is less likely to defend, and a group that is already subject to greater restrictions.
Easier still to enforce restrictions on would be handful of financial intermediaries. Another example would be restrictions on investment. The SEC prohibits companies from selling stock to the public without meeting onerous registration requirements, but it does not prohibit the public from buying stock from companies without SEC approval to sell stock. The ban on the stock issuer is enough to deny the public the ability to invest in non-SEC-approved stock, and it is politically much more viable than imposing prohibitions directly on the public.
The administrative and political cost of imposing authoritarian policies increases in proportion to the size of the set of parties that need to have their actions restricted to effectively enforce the policy.
The solution to, the government is extrajudicially spying on our transactions and without due process blocking people from their finances, is not a system that uses an immutable public ledger. It’s reforming the law to protect people’s right to privacy and due process. It’s getting rid of the authoritarian government that strips people of their rights and freedoms.
Governments can engage in broad based prohibitions that affect large subsections of the population, but they are less likely to do that than imposing restrictions on smaller subsets of the population who constitutes chokepoints through which a much larger number of people can be prevented from engaging in an interaction.
Earlier I made the point that:
The administrative and political cost of imposing authoritarian policies increases in proportion to the size of the set of parties that need to have their actions restricted to effectively enforce the policy.
That does not imply that growing the size of the minimal set of parties whose actions need to be restricted for the state to successfully repress a class of interactions guarantees that that class of interactions will not be repressed. It means that fewer governments, in fewer contexts, will pursue a prohibition, as the size of that set grows.
If you're looking for a silver bullet that guarantees a people will live free of tyranny, then the blockchain is not it. It is just one of many institutions that counteract the tendency toward repression. And that's the best any institution can ever be.
>>The solution to, the government is extrajudicially spying on our transactions and without due process blocking people from their finances, is not a system that uses an immutable public ledger. It’s reforming the law to protect people’s right to privacy and due process. It’s getting rid of the authoritarian government that strips people of their rights and freedoms.
The solution is to pursue both. When the political track fails, a non-political check on the power of the state—like wide adoption of cash—can potentially save a people from greater levels of tyranny.
The anti-crypto contigent are consistently small-minded neurotic individuals who could be safely ignored if they did not back repressive government measures like futile COVID lockdowns, or a "War on Drugs" or "War on Crypto".
There is a CBDC (Central Bank Digital Currency) in a pilot phase in India since last year.
I personally think a centrally owned service like the IPS is very useful. I just think we would be better off having a permissionless and decentralized alternative that has wide enough adoption to make useful and hard to prohibit, to both provide competition to the centrally controlled network, and to act as a failsafe in case that network is mismanaged and run in an abusive fashion, e.g. locking out those who refused to get a COVID vaccine.
* 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 :).