UPI123Pay

The usage of UPI, both in terms of the number of transactions (green line) as well as the amount of money being transferred (blue bars), has been increasingly exponentially over the years. In 2021, it hit $840 billion.


 

But UPI was restricted to those who had a smartphone. (That means 40 crore feature phone subscribers were left out). Which is why the RBI launched UPI for feature phones, aka UPI123Pay on 9th March.

 

UPI123Pay doesn’t even require an Internet connection! Here’s how it works: the “123” refers to it being a 3-step process to transfer money via the feature phone – call, choose, and pay. But first, the user has to link his (feature) phone to his bank account. At which point, he’d be asked to set his UPI PIN using his debit card. With that, he is good to use UPI123Pay.

 

To transfer money, (1) he needs to call an IVR number from his feature phone (the IVR works in multiple languages) (2) He then selects whom to transfer the money to – another individual, or to pay a bill etc. (3) If he is transferring to an individual, he enters that person’s mobile number and amount, else just the amount to pay. Then he enters the UPI PIN to confirm the transaction.

 

See how this worked? The IVR service, since it is owned by the RBI/government, takes care of the last step (transferring money via UPI, which would have needed an Internet connection, and thus a smartphone). The articles I read didn’t clearly explain how one pays a merchant (say Amazon or Myntra); but the facility is indeed supported via UPI123Pay (it’s only me who couldn’t find a clear explanation on how it is used). All this is excellent since digital payment systems won’t be restricted to smartphone owners only.

 

As an aside, it is increasingly becoming clear that both India and China are switching into domestically designed digital payment systems (government owned UPI in India; private sector financial payment apps in China - like how PayTM used to work before UPI). So much so that Apple has been forced to acknowledge market realities in both countries – they accept payment via the private sector apps in China; and in India, they accept payment via UPI, Netbanking, and even RuPay card.

 

Having one’s own financial payment systems – both in India and China – means that VISA and MasterCard will never get these countries. That’s 2 billion potential users they won’t get. Who wants plastic when one has a phone? Another benefit of such home-grown solutions is what the Ukraine war shows – American companies can choose to pull the plug whenever they want. Sure, neither Chinese nor Indian payment systems are accepted internationally yet. Then again, how often does one need to be making payments internationally anyway?

Comments

Post a Comment

Popular posts from this blog

Student of the Year

Image
As a toddler, my daughter loved Alia Bhatt’s songs, esp. the ones from Student of the Year . (That movie did have many good songs and well-choreographed dances). Fast forward to present day, when she is 12 yo. She rarely watches Hindi movies now, but one of the few ones she likes of late, Raja aur Rani ki Prem Kahani has, yes, Alia Bhatt.   If I had any hopes that there was anything to be read in the name of her toddler-time favorite ( Student of the Year ), they have been dashed. Our conversations come exam time are perfectly captured by this photo and its caption: In fact, the pic below captures how she and I look at her answer sheets – me intently, she with an expression of “It’s over, so why are you even looking at it?”   Of late, we pull her leg and tell her that she isn’t showing any signs of academic prowess, she’d better find a rich guy to marry. Some time later, she showed us this meme on the Internet: “Me No Study, Me No Care Me Go Marry Millionaire If He Die
Read more

Why we Deceive Ourselves

In their book, The Elephant in the Brain , the authors describe this weird aspect of deception that we practice: deceiving ourselves! That is so weird: “If our minds contain maps of our worlds, what good comes from having an inaccurate version of these maps?” The Sigmund Freud school of thought treats self-deception as a defense mechanism, “a way for the ego to protect itself”. The mind seeks to protect itself from anxiety and other negative emotions. Many object to this reasoning: since accurate information is so critical to our survival, surely distorting information would be dangerous. Wouldn’t the goal of protecting our self-esteem have been better achieved by making the brain’s self-esteem mechanism stronger instead? The new school of thought explains self-deception as “primarily outward-facing, manipulative, and ultimately self-serving”. This is based on Thomas Schelling’s work on game theory: “In a variety of scenarios, limiting or sabotaging yourself is the winn
Read more

Handling of the Satyam Scam

The Satyam scam. How does that fit into Montek Singh Ahluwalia’s book on reforms in India, Backstage ? The reason is that, as both NASSCOM and the government of India felt: “(Satyam’s) collapse would create a great deal of disruption for clients worldwide and seriously damage India’s reputation as a reliable source of software services.”   Therefore, the government decided to work with the private sector to “organize a quick takeover by a reputable new buyer, who would quickly restart the company”. But that could not be done overnight. In the meantime, the new board would have to reach out to Satyam’s clients and “reassure them that the company would survive”.   For the new board to have credibility when it made that statement, it had to be staffed with people who understood the private sector, the IT sector in particular, and commanded respect and trust. Deepak Parikh from HDFC was made chairman, and other members of the board included a former NASSCOM chairman, CII member,
Read more