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Comment by db1234 | Hacker News Reader

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

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Super affordable smartphones and cheap and fast 4G data, great apps like GPay and PhonePe with lots of gamification and cashbacks and ubiquitous merchant acceptance through apps like PayTM, PhonePe and GPay were key drivers for this.

Then, demonetization and covid were accelerants to achieve critical mass. Post 2022, its been unstoppable.

one conspiratorily wonders if its a government ploy to turn everyone cashless so that they can be debanked at will.

Cash is a less than optimally efficient part of the current economic systems, not unlike credit cards are The logical conclusion of technological development in this area would be something like a micro hardware security key storing blockchain wallet keys implanted inside your hand, activated by your thoughts or a certain movement or something, at least as far as I guess.

Jiophone helped a lot

Pulling currency from circulation overnight also did.

Not so much, actually. What really led to the rapid uptake of UPI was Covid and people's reluctance to handle cash as a result of it.

> What really led to the rapid uptake of UPI was Covid and people's reluctance to handle cash as a result of it.

That timeline doesn't make sense. UPI was already a spectacular success by 2019.

In 2019 it was gaining traction, as the article shows the volume of transactions were around 1 billion per month in March 2019.

the opportunity to mine all this data by the government for any policy or intervention cannot be underestimated.

Good point.

This is inaccurate. COVID solidified what was already growing in usage. The really stupid demonetisation exercise was the main factor

Jio's push for 4G and unlimited data packs helped a lot as well. Pre-jio, internet was too expensive, unreliable, and slow to use frequently.

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

If that road side vendor doesn't have access to a phone, how does she know the payment was made?

they usually have a sound box, which will announce if a payment is made to their UPI id.

there was an article about this on some news website recently. maybe the above one. ... i read, it is that one. good article.

The banks provide 4G-enabled speakers either for free or very cheap.

These speakers automatically read out any credit into the account.

Even a vendor who can’t read can use UPI to reliably receive payments.

Dont get carried away by tech thats offered for "free".

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.

There are 5 parties in UPI (or any payment system really): 1. bank customers, 2. bank, 3. payment network, 4. 3rdparty apps (TPAPs) 5. merchants.

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.

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