Currency Demonetisation and Future course of Indian Economy

[Atmavik]

Arhar prices fall below MSP after bumper crop

http://www.livemint.com/Politics/tpyKMu ... -crop.html

After moong, prices of arhar, a major rain-fed kharif crop, have plunged below support prices in major growing states such as Karnataka and Andhra Pradesh where the crop has reached markets.

The dip in wholesale prices follows a record crop due to a normal south-west monsoon and farmers increasing its acreage, taking a cue from retail prices which shot up to Rs200 per kg earlier this year.

"Arhar Modi"

[Atmavik]

Either they are stupid or very arrogant that they can buy off officials. It was so blatant, hard to imagine how they would have escaped authorities.

i think its a case of making mistakes in panic. or tax evasion was so easy that they have not thought this thru. anyway i was waiting for a big haul from HYD. i know many business men who have never paid a paisa in Tax.

there you go.

Musaddilal Jewellers Directors arrested, Conversion of Black Money

http://www.siasat.com/news/musaddilal-j ... y-1096885/

PS: duplicate

[jamwal]

How much do Visa and MasterCard charge? Is it a percentage basis or is there a flat fee after certain amount. If they charge 3% for 100 dollars, its kind of acceptable. If they charge the 3% for 1000 dollars, its a serious dent in profits for the merchant. If the merchant factors that into the cost, then it is a significant amount for the customer.

I am no businessman and I don't understand how these calculations about "denting profits" is done

But there are a hajaar items that one can buy that are marked with an MRP - which is actually MAXIMUM retail price (not Minimum retail price) as say Rs 800. There will be merchants who sell it at Rs 800. If you go to the right places you get merchants who sell the same item for Rs 650. Others may drop it down to Rs 620 for you. A other times -you order the same item online and get it for 500. Some guys will charge Rs 820 and justify that

What exactly is this business of 2% or 3% being a huge huuuuge deal for merchants. Some merchants seem to act like 2% is a big deal and then say that their families have been successful as merchants for 500 years because of these attitudes. There are other merchants who are also successful who don't have any such issues.

Just like showing media image of bank queue in Patna and no bank queue in Bengaluru - there are variations. Indignantly claiming that only "One way and one path" is the true and correct path seems to be the problem to me.

Everyone here is missing one simple point that the 3-4% charge on card is on complete sale amount not profit .
For example, if a shopkeeper sells you soap worth 100, his profit will be around 15. So for a sale of 100, he is making 15 when payment is in cash. With 3% charge on sale amount, the margin is just 12. 20% is a big cut.

[UlanBatori]

Time that Baniastan learned to go to a less predatory system for monsoon-dependent crop prices. Invest in storage, canning, alternative uses; provide a mega-bank to stabilize prices across say 3-5 year running averages. This Darwinian cycle of boom-bust-farmer-suicides is disgusting and immawral, to use Steve Forbes' terminology. The Fittest who survive are exactly the wrong kind for national growth.

[shiv]

Everyone here is missing one simple point that the 3-4% charge on card is on complete sale amount not profit .
For example, if a shopkeeper sells you soap worth 100, his profit will be around 15. So for a sale of 100, he is making 15 when payment is in cash. With 3% charge on sale amount, the margin is just 12. 20% is a big cut.

That is the theory - but a large number of outlets simply charge the customer that extra amount and there is nothing they can do about it. This is done openly and transparently. For example the "Sagar auto" Maruti service centre down the road from where I live has a sign above the cashier's window saying 2% extra for credit card payment. Every computer dealer on SP road in Bangalore - where stuff is sold well below MRP that one would pay in retail high street outlets also charge 2% extra to the customer. And most refuse credit card payment for small sums.

So in the Maruti showroom a bill of 8000 attracts a credit card "tax" of Rs 160. Or else I must cough up cash. Although Credit card companies claim to discourage this they don't care.

Credit card companies on the other hand (Like Citi) that I have had for the last 25 years waive my annual fee as long as I transact more than a particular amount per year on my card. That suits me fine.

[EswarPrakash]

BTW: Do not believe that corruption is the national habit of the people. I lay 90% of the blame on the system. After all in Amrika, Barbaria or Singhaland, the same Indian behaves. The vaishya pays his taxes....

Fear of danda is one. "What will the white man think?" is the other. The same "vaishya" seems to have a very negative attitude when dealing with their Indian brethren in the same lands.

[SBajwa]

Prices of essential food items are falling because the middle men who use to hoard Dals, vegetables, etc do not have incentive to hoard them anymore. They are also dumping their earlier hoarded items into the market. So this tells me that all the issues of prices of Onions, Dals, etc were 100% created by middlemen hoarders (tied with various political parties for example rise in Onion prices were cashed in by Congress 2 times in Delhi ) who once prices go up converted their items into Black Money.

[Atmavik]

Everyone here is missing one simple point that the 3-4% charge on card is on complete sale amount not profit .
For example, if a shopkeeper sells you soap worth 100, his profit will be around 15. So for a sale of 100, he is making 15 when payment is in cash. With 3% charge on sale amount, the margin is just 12. 20% is a big cut.

That is the theory - but a large number of outlets simply charge the customer that extra amount and there is nothing they can do about it. This is done openly and transparently. For example the "Sagar auto" Maruti service centre down the road from where I live has a sign above the cashier's window saying 2% extra for credit card payment. Every computer dealer on SP road in Bangalore - where stuff is sold well below MRP that one would pay in retail high street outlets also charge 2% extra to the customer. And most refuse credit card payment for small sums.

So in the Maruti showroom a bill of 8000 attracts a credit card "tax" of Rs 160. Or else I must cough up cash. Although Credit card companies claim to discourage this they don't care.

Credit card companies on the other hand (Like Citi) that I have had for the last 25 years waive my annual fee as long as I transact more than a particular amount per year on my card. That suits me fine.

most petrol pumps in khan land have this 5% extra for credit

[Sachin]

Round up..

• Huge deposits: I-T notices to 1,300 individuals, firms
  Section 133(6) in The Income- Tax Act, 1995
  (6) require any person, including a banking company or any officer thereof, to furnish information in relation to such points or matters, or to furnish statements of accounts and affairs..
• Sekhar Reddy case: ED arrests two in Chennai
  The agency has identified the two as Mahavir Hirani and Ashok Jain and said they were arrested under the provisions of the Prevention of Money Laundering Act (PMLA).

Have they raided Amanath Bank yet is the real question. Ex Railway Min (Jaffy bhai) and family plus peaceful friends are all deeply involved. Laundering is not out of the question at all. My insider leads have gone underground else would have shared juicier tidbits.

Amanath bank was in a mess even much before. AFAIK, around two years back itself it was clearly out in the open that the bank's financial reserves are practically non-existant. How the money of the account holders vanished, no body got a clear picture. How ever the bank operators as well as the main account holders were majorly from "one particular community", so perhaps people just ignored it thinking that all the issues are within that community so why bother.

Canara Bank seems to be the bakra now..
Canara Bank close to takeover of Amanath
Amanath bank merger row: HC summons Canara Bank MD
Amanath Bank bailout case: High Court asks Jaffer Sharief to pay Rs 43 crore

Case in point , "Thieving Merchant class". Have we ever asked why merchant classes are not prone to paying taxes and why that is our national character ?

Long back I had read the Arthasastra by Chanakya (who for sure came much before the Brits or Moghals). In the chapters which lists out punishments for offences, few sections were dealing with the merchant class. Surprisingly for any crime which involves a trader and the buyer/consumer, the punishment for the trader was always high. The reason given out was that the trader has more chances to evade tax (in those day by tampering weighing scales etc.), and the majority of them would use that to evade tax. So make the punishments more higher to them (by default).

For the question of where all the cash sent to South went, the answer seems to in the IT raids on the CS of TN and other things that are happening in Chennai.

This is purely my gut feelings (and not based on any research). During the initial days, especially when the new 2000s were issued most of them seem to have gone directly to the big time frauds of Karnataka, Telengana and AP.Next in line would be Tamil Nadu. Last in line would be Kerala, where perhaps a few hawala dealers seems to have got hold of the new notes. If you notice for any major event (marriage et.al) the literal throwing of money generally happens in Karnataka, A.P and TS. Things are a bit subdued in TN and Kerala, partly may be due to enforcement being stricter there.

[hanumadu]

Black money seizure: Rs 50 crore seized from Karnataka’s cooperative bank

[Sachin]

Karnataka: 14 co-op banks in I-T net for abetting tax evasion
"We have, as of today, found out an amount of Rs 7,636 crore in 14 searches conducted on banks, especially cooperative banks in current year across Karnataka... We have taken action {What action; that could have been specified} against 14 cooperative banks as they have been exposed to prosecution for holding back information, which amounts to aiding and abetting tax evasion," he said.

[hanumadu]

Everyone here is missing one simple point that the 3-4% charge on card is on complete sale amount not profit .
For example, if a shopkeeper sells you soap worth 100, his profit will be around 15. So for a sale of 100, he is making 15 when payment is in cash. With 3% charge on sale amount, the margin is just 12. 20% is a big cut.

That is the theory - but a large number of outlets simply charge the customer that extra amount and there is nothing they can do about it. This is done openly and transparently. For example the "Sagar auto" Maruti service centre down the road from where I live has a sign above the cashier's window saying 2% extra for credit card payment. Every computer dealer on SP road in Bangalore - where stuff is sold well below MRP that one would pay in retail high street outlets also charge 2% extra to the customer. And most refuse credit card payment for small sums.

So in the Maruti showroom a bill of 8000 attracts a credit card "tax" of Rs 160. Or else I must cough up cash. Although Credit card companies claim to discourage this they don't care.

Credit card companies on the other hand (Like Citi) that I have had for the last 25 years waive my annual fee as long as I transact more than a particular amount per year on my card. That suits me fine.

As long as credit card transactions are extra, it will be difficult to convince people to go cash less. Ideally, merchants should be charging the same amount for whatever mode of payment. Competition in the mode of UPI and Aadhar payment will force credit card companies to reduce their fee. Perhaps, they can make it worthwhile for the merchant to pay the extra fee by providing value added services.

Credit cards do remove the hassle of dealing with cash for the merchants and the payment is guaranteed unlike a bounced check or siphoning of cash by employees. It's a question of whether the benefits are worth the loss in profit. In countries where it is common to stick up shops, merchants would be only too eager to switch to cash less payments. Thank fully that's not the case in India. CC companies should show other benefits for merchants to adapt them.

[jamwal]

Cash is not a hassle in India. When everything can be bought with cash, then how can you call cash a hassle ? Use it up for your daily needs, store the rest in safe or deposit it in bank whenever convenient. That's what most people do.

Cards need maintenance of a complete transaction trail, settling accounts with banks, maintaining and troubleshooting machines which happens a lot more often than what most people think. When networks go down, then how will you accept cards ? Then there is another risk of idiot/malicious customers changing mind and disputing transaction later, card theft and various other issues which protect customers but do little for merchants. From my rather limited experience, merchants need following in order to promote cashless transactions:

1) Lower transaction fees.
2) Better reliability and network uptime.
3) Protection in case of stolen cards and frivolous payment disputes.
4) Lesser paperwork and ease of obtaining machines.

[Nirantar]

I have gone to my native place and on DeMo discussed the matter with many including shopkeepers and BJP leaders.
1. Cash problems are quite acute in South. Even in Urban areas also. Please have many challenges because no shopkeeper etc. helped people in many cases.
2. Bank ATMs in most of the places are not working at all. Only 5-10% of them are only working.
3. People are helping each other with cash. I needed cash, and my relatives have given it to me, and I transferred money to their account.
............ted in the help of RBI people, many bank employees, and post office people. Now as per the information, some 1000 IT officials are investigating this along with some companies of police deployed there. One minister ( Venkayya) said to have tried to help them but failed as no one ...... People are saying a large number of discrepancies will be seen if there is any investigation done now in Axis Bank.
...

While browsing through the last 5-6 pages, I could not find a single post on this issue. This blatant criminal practice by the bankers has eroded the confidence of the masses. Many known persons of friends in circle have pointed that the buggers have exchanged the deMo notes in crores and have made a big cut. Each of these spoilsports should be severely punished to make an example out of them

[Lisa]

How much do Visa and MasterCard charge? Is it a percentage basis or is there a flat fee after certain amount. If they charge 3% for 100 dollars, its kind of acceptable. If they charge the 3% for 1000 dollars, its a serious dent in profits for the merchant. If the merchant factors that into the cost, then it is a significant amount for the customer.

It is around 2-3%. Yes, as far as I know the larger transactions will have lower rate. This rate is an accepted norm since the inception of credit card. Last 5 years, there is lot of downward pressure on this rate but it is reaching a point where it cannot go any lower. However big stores like Walmart and Costco are still throwing their muscle. For example Costco recently moved away from Amex to Visa(citi) to bring the commission rate from .6% to 0.0% which is ridiculous. Citi is hoping to capture the share of wallet from other purchases but it is a very costly gamble.

2-3% fee for credit card is reasonable considering the card member doesn't pay for a month(interest expense) and the card issuer has to bear the risk of not being paid (write off expense). But for debit cards this is not true as the amount is deducted immediately at the time of transaction authorization and there is no risk. That is why anything more than 1% on debit cards is robbery and most of the cards in India are debit cards. Many countries around the world are setting regulations to put cap on the fee for debit cards and the rate is much lower than 1%.

Don't know how much paytm charges but in the long run they have to comedown, otherwise they will be out of business. Unlike payment networks like Visa, MC, Amex , the bar for new entrants is very low when it comes to payment gateways and processors like paytm. So it will be matter of time paytm falls in line.

Dasarji,

In the UK, debit card charges are fixed, ie as there is no credit element involved a fixed charge is levied irrespective on the value of the transaction. We currently pay 11p. In India such a charge cannot exceed a single digit Rupee value. Under no circumstances must a percentage fee be permitted as it discourages use and furthermore enriches banks in that a debit card transaction for 10 Rs costs the same to process as a 1Cr Re transaction, correct?

[Yagnasri]

Round up..

• Huge deposits: I-T notices to 1,300 individuals, firms
  Section 133(6) in The Income- Tax Act, 1995
  (6) require any person, including a banking company or any officer thereof, to furnish information in relation to such points or matters, or to furnish statements of accounts and affairs..
• Sekhar Reddy case: ED arrests two in Chennai
  The agency has identified the two as Mahavir Hirani and Ashok Jain and said they were arrested under the provisions of the Prevention of Money Laundering Act (PMLA).

Have they raided Amanath Bank yet is the real question. Ex Railway Min (Jaffy bhai) and family plus peaceful friends are all deeply involved. Laundering is not out of the question at all. My insider leads have gone underground else would have shared juicier tidbits.

Amanath bank was in a mess even much before. AFAIK, around two years back itself it was clearly out in the open that the bank's financial reserves are practically non-existant. How the money of the account holders vanished, no body got a clear picture. How ever the bank operators as well as the main account holders were majorly from "one particular community", so perhaps people just ignored it thinking that all the issues are within that community so why bother.

Canara Bank seems to be the bakra now..
Canara Bank close to takeover of Amanath
Amanath bank merger row: HC summons Canara Bank MD
Amanath Bank bailout case: High Court asks Jaffer Sharief to pay Rs 43 crore

Case in point , "Thieving Merchant class". Have we ever asked why merchant classes are not prone to paying taxes and why that is our national character ?

Long back I had read the Arthasastra by Chanakya (who for sure came much before the Brits or Moghals). In the chapters which lists out punishments for offences, few sections were dealing with the merchant class. Surprisingly for any crime which involves a trader and the buyer/consumer, the punishment for the trader was always high. The reason given out was that the trader has more chances to evade tax (in those day by tampering weighing scales etc.), and the majority of them would use that to evade tax. So make the punishments more higher to them (by default).

For the question of where all the cash sent to South went, the answer seems to in the IT raids on the CS of TN and other things that are happening in Chennai.

This is purely my gut feelings (and not based on any research). During the initial days, especially when the new 2000s were issued most of them seem to have gone directly to the big time frauds of Karnataka, Telengana and AP.Next in line would be Tamil Nadu. Last in line would be Kerala, where perhaps a few hawala dealers seems to have got hold of the new notes. If you notice for any major event (marriage et.al) the literal throwing of money generally happens in Karnataka, A.P and TS. Things are a bit subdued in TN and Kerala, partly may be due to enforcement being stricter there.

From what heard from BJP leaders - Few officials or RBI, Banks and post offices did diverted cash containers running into crores of rupees. Institutionally Axis and IDBI help to facilitate. Post office in coastal AP also involved. 64 Branches of Banks in AP are under investeations. I could not get the details more than that.

@Nirantarji - Not all bankers did mischeif like that sir. Yes people did some serious wrong things and they mainly belong to New Gen Banks like Axis. In PSU banks also people did wrong things but they have not reached the levels of Axis as per the reports I got. As you may be knowing I myself is with Banking. There will be bad appels almost every sector and Banking have its share. The problems is the systamic failure in Axis and others which allowed huge mess to take place.

[Deans]

That is the theory - but a large number of outlets simply charge the customer that extra amount and there is nothing they can do about it. This is done openly and transparently. For example the "Sagar auto" Maruti service centre down the road from where I live has a sign above the cashier's window saying 2% extra for credit card payment. Every computer dealer on SP road in Bangalore - where stuff is sold well below MRP that one would pay in retail high street outlets also charge 2% extra to the customer. And most refuse credit card payment for small sums.

So in the Maruti showroom a bill of 8000 attracts a credit card "tax" of Rs 160. Or else I must cough up cash. Although Credit card companies claim to discourage this they don't care.

Credit card companies on the other hand (Like Citi) that I have had for the last 25 years waive my annual fee as long as I transact more than a particular amount per year on my card. That suits me fine.

As long as credit card transactions are extra, it will be difficult to convince people to go cash less. Ideally, merchants should be charging the same amount for whatever mode of payment. Competition in the mode of UPI and Aadhar payment will force credit card companies to reduce their fee. Perhaps, they can make it worthwhile for the merchant to pay the extra fee by providing value added services.

Credit cards do remove the hassle of dealing with cash for the merchants and the payment is guaranteed unlike a bounced check or siphoning of cash by employees. It's a question of whether the benefits are worth the loss in profit. In countries where it is common to stick up shops, merchants would be only too eager to switch to cash less payments. Thank fully that's not the case in India. CC companies should show other benefits for merchants to adapt them.

Debit card charges are low enough to encourage merchants to accept them (see my previous post). Credit card charges are higher because the customer pays a month later. Hence the merchant sometimes charges the customer the 2% interest he loses (he wont charge for a debit card transaction). He pays the card issuer 2% (or 1.5% more than debit card charges), since he is getting an `extra' sale from money the customer does not have at the moment, which is worth 2% to him.

Cash also has a cost for merchants. It can be stolen. There are torn notes and fakes. Cash collection charges are typically 0.5- 1% of cash deposited. When running a large retail chain some years ago, I've found that the cost of debt/credit cards was no different from cash and removing a card facility resulted in lost business (even for a average bill value of Rs 200) . Since then costs have moved in favor of cards/ digital payments.

[JayS]

We helped set up PayTM account to our office canteen guy. Currently PayTM is not charging money to transfer money to bank account. But they have 4% charge otherwise. Also one shortcoming a guy in office pointed out is PayTM does not show name of the person whom you are transferring money upfront. So if you by mistake put wrong phone number, you would know that only once money is transferred when you see wrong person name (haven't tried myself).

We now encouraged our Canteen guy to also try out UPI. Since its free and hassle free, and connected to bank account directly. I personally found UPI better than PayTM. It also gives name of person who you are sending money once you enter VPA before transacting. I feel its little more assuring. And for <1000Rs its free I guess. Even for higher amount its nominal charges. Once UPI goes full steam PayTM will have real trouble in attracting users. I find UPI to be a fantastic system. If they can get it to feature phones somehow, it would span a large section of society.

[JayS]

Debit card charges are low enough to encourage merchants to accept them (see my previous post). Credit card charges are higher because the customer pays a month later. Hence the merchant sometimes charges the customer the 2% interest he loses (he wont charge for a debit card transaction). He pays the card issuer 2% since he is getting a sale from money the customer does not have at the moment, which is worth 2% to him.

Cash also has a cost for merchants. It can be stolen. There are torn notes and fakes. Cash collection charges are typically 0.5- 1% of cash deposited. When running a large retail chain some years ago, I've found that the cost of debt/credit cards was no different from cash and removing a card facility resulted in lost business (even for a average bill value of Rs 200) . Since then costs have moved in favor of cards/ digital payments.

But some shop owners ask that 2% even for Debit cards. I think, atleast some of the shop owners want to discourage people from paying by cards, so the shop owner can save taxes easily.

[Nirantar]

....

@Nirantarji - Not all bankers did mischeif like that sir. Yes people did some serious wrong things and they mainly belong to ..

Saar, not all bankers I meant but only the rots and the harsh punishment for those only. Being very naive on their part. Not sure how they thought they will get away with this. Even by using stolen adhar cards/IDs, they will be caught once IT/ED/CBI initiates the probe into. How will they explain when the adhar card owner will disown the deed.

Btw. kudos to all hardworking and honest bankers!!

[Yagnasri]

As you may be knowing New Gen Bank staff are not permanent like old Gen Bank. No IBA salaries nothing. Training levels of most of the bank staff are very weak. But there are systems in place in the bank and even in this DeMo that will prevent mischief. Still if few of the staff join they can loot the bank. That is what has happened in many cases of DeMo I think. They all will get caught in the end. But the damage to the banks is done already.

[Hari Seldon]

Hard to see how these johnny-come-latelys like paytm will withstand UPI competition. What is free is free (UPI), nominal charges, and directly connected to bank account too. Beat that.

IMO, within 2 yrs, by which time most janta 35 yrs old and below would have transitioned peacefully to digital and mobile based payments - UPI will beat the crap out of these wallet types hands down. The trade will insist on it.

Meanwhile, RuPay flounders with active discouragement by private/phoren banks and lacklustre push from PSBs.... while the likes of visa and MC rule the roost. sigh.

[Yagnasri]

Rupay may not fail like that. What is going to happen is UPI will be the game changing thing and PayTM may end up losing money ( Alibaba investments:mrgreen: )

We have not seen the end game of this DeMo yet. It will take up to Feb 2017 for currency to be available to all. Before that time huge e-payment push will be there. We have paid the purohit by online payment for performing my mother ceremony.

[Chandragupta]

Also put a limit on how many Rs 500 notes one can possess - making it punishable to have more than X amount in Rs 500 notes

Why this obsession with punishing people? Why not just outlaw anything above Rs.100? Makes more sense than to have corrupt bolis & IT guys checking into every person's wallet "chal bata kitne hain?"

[kvraghav]

Yesterday my wife had the sudden urge to buy gold because her sister had bought and displayed to her. These wemen. Anyways, that's when I found out that the max transaction limit on the debit card is 50k and had to max out the credit card. Called Citibank and came to know I can increase the limit temporary or permanent but had to call 12hrs before. Its difficult to do any large retail transactions cashless. No wonder sadananda gowda had to use chequeu in hospital.

[Primus]

How much do Visa and MasterCard charge? Is it a percentage basis or is there a flat fee after certain amount. If they charge 3% for 100 dollars, its kind of acceptable. If they charge the 3% for 1000 dollars, its a serious dent in profits for the merchant. If the merchant factors that into the cost, then it is a significant amount for the customer.

It is around 2-3%. Yes, as far as I know the larger transactions will have lower rate. This rate is an accepted norm since the inception of credit card. Last 5 years, there is lot of downward pressure on this rate but it is reaching a point where it cannot go any lower. However big stores like Walmart and Costco are still throwing their muscle. For example Costco recently moved away from Amex to Visa(citi) to bring the commission rate from .6% to 0.0% which is ridiculous. Citi is hoping to capture the share of wallet from other purchases but it is a very costly gamble.

2-3% fee for credit card is reasonable considering the card member doesn't pay for a month(interest expense) and the card issuer has to bear the risk of not being paid (write off expense). But for debit cards this is not true as the amount is deducted immediately at the time of transaction authorization and there is no risk. That is why anything more than 1% on debit cards is robbery and most of the cards in India are debit cards. Many countries around the world are setting regulations to put cap on the fee for debit cards and the rate is much lower than 1%.

Don't know how much paytm charges but in the long run they have to comedown, otherwise they will be out of business. Unlike payment networks like Visa, MC, Amex , the bar for new entrants is very low when it comes to payment gateways and processors like paytm. So it will be matter of time paytm falls in line.

True. CC companies take on huge risks by allowing what is essentially a short term interest-free loan to the buyer. If you time it right, you have at least four weeks to pay and then the option of extending it further albeit at very high interest rates. Still, many households are constantly running CC debt, I know I've done it in the past when the going was tough. You also have a huge convenience factor, being able to use your plastic money anywhere in the world (imagine trying to carry cash in different currencies if you travel often, or even within the same country). I've had nightmares in India in the 80s when I ran out of cash in a small town with no means to pay for food. My British checkbook was useless and credit cards were not accepted.

Then they also have to factor in the losses incurred when your card is stolen or lost and they have to write off the bad transactions perpetrated in your name.

The typical fee in the US is 3% for MC and Visa (regardless of amount) and higher for Amex (which is why it is not popular). Amex offers several advantages to its members hence the higher fees. The seller (or merchant) assumes the fees as part of doing business. Retail businesses that are 'cash only' will not attract that many customers.

Debit cards are absolutely free since they money is deducted instantly from your bank accounts.

I buy and sell a lot of used photo gear online, and Paypal is the only way to go. Standard fees of 3% are charged and usually the seller ends up paying although you can negotiate a deal where the buyer may have to do so.

[RajeshG]

I dont know how to post images from the article, but all interesting stats.

http://www.bloombergquint.com/opinion/2 ... al-nuances

It is difficult to conclude whether a lower CIC-to-GDP ratio is a sign of a more developed or structurally evolved economy. If it is, then how does one explain countries such as Japan, Hong Kong, Switzerland having ratios which are either higher or comparable to that of India? The World Bank ranks these countries higher on ease of doing business, as well as tax and regulatory compliance.

CIC = currency in circulation

There may be some truth to the assumption that higher tax compliance tends to reduce the CIC-to-GDP ratio. To that extent, efforts already underway such as the implementation of the Goods and Services Tax (GST) would be beneficial.

Sweeping statements are avoidable since Brazil, India, Canada and the U.S. have a comparable tax-to-GDP ratio but divergent CIC-to-GDP ratios.

[shiv]

Also put a limit on how many Rs 500 notes one can possess - making it punishable to have more than X amount in Rs 500 notes

Why this obsession with punishing people? Why not just outlaw anything above Rs.100? Makes more sense than to have corrupt bolis & IT guys checking into every person's wallet "chal bata kitne hain?"

Good idea. Maybe more positivity - like anyone with 50000 to 1 lakh will get a kiss from Police woman/man (tick the correct box). 1-2 lakh will get "tut tut" etc . No punishment

[JayS]

Rupay may not fail like that. What is going to happen is UPI will be the game changing thing and PayTM may end up losing money ( Alibaba investments:mrgreen: )

We have not seen the end game of this DeMo yet. It will take up to Feb 2017 for currency to be available to all. Before that time huge e-payment push will be there. We have paid the purohit by online payment for performing my mother ceremony.

You are quite right about UPI sir. Its in some ways ground breaking and totally bypassing the current trend where people thought digital wallets (e.g. Apple wallet) would lead the cashless economy. But UPI did one up by giving hassle free interface directly to the bank accounts. UPI may displace NEFT/IMPS, digital wallets and debit cards if GOI can provide UPI for all phones. UPI transfer is as fast as card transaction. Things like QR codes, NFC could be implemented to aid UPI.

Maybe NPCI could merge IMPS and UPI to avoid duplication, in future. They could simply stop RTGS/NEFT and use those resources in this single system.

BTW PayTM is not allowing to transfer money to bank account. Some technical problem on their side may be. We set up account for our canteen guy. He accepted some 4k from customers and now his money is stuck in PayTM (unless he can transfer it to some of his suppliers). Some other colleagues told me same thing that they are also not able to transfer back money to bank account. This is ridiculous and totally unacceptable. I anyway think PayTM will have hard time putting up a case against UPI.

[pankajs]

^
PayTM may be waiting for the grace period to get over so that they can make their usual cut. Very sneaky.

[JayS]

^
PayTM may be waiting for the grace period to get over so that they can make their usual cut. Very sneaky.

If so, I wish PayTM die a natural death soon enough.

[shiv]

The main advantage of credit cards is the lack of need to carry cash. I got my first card in the early 80s in the UK and never stopped carrying one even back in India.

The bulk of my income has been by cheque for 35 years by and I would have to make a cash withdrawal even to spend 5000 plus. This is a real pain as far as I am concerned and I always stared at the wallets of my friends who appeared to have at least 10k in cash. Carrying a thick wallet in my hip pocket in the car started pressing on the main nerve that runs from the hip down the leg and started hurting.

Among my colleagues and peers in India my behaviour was more like itvity crowd and I started paying all my bills online even before onlin payment facility was available.I kid you not. Citibank had this system where I could pay with mouse click and they would send a chap with a physical cheque in my name to pay the bill Online bill payments are relatively recent in India and I never adopted that idiotic automatic pay system where I had to individually permit the bank to pay each utility bill after completing some idiotic formalities like submitting a cancelled cheque or some shit like that

I have lived a relatively cashless life for so many years now I am not about to change and I suddenly find all my fatwallet friends coming and telling me "You know how easy it is to pay. I don't have to stand in line any more". One friend who told me this yet again today asked me "Have you heard of YouTube?" We have in India some of the most aware and worldly wise people

Speaking of queues - the standing in queue business is such a stupid excuse. Thousands of people stand in 2 queues every month - one to pay electricity bill and another to pay water bill. No one counts how many people have died doing that.

[arshyam]

Anyways, that's when I found out that the max transaction limit on the debit card is 50k and had to max out the credit card.

This is probably a bank enforced limit. I bought a TV last month for 60-odd, used my ICICI debit card. No issues.

Having said that, a limit on debit cards is a good thing, provided I can set it from net banking or an ATM. Gives one peace of mind in case the card gets stolen. At least with credit cards, one can dispute fraudulent transactions, but no such luck on debit card transactions.

[JayS]

Speaking of queues - the standing in queue business is such a stupid excuse. Thousands of people stand in 2 queues every month - one to pay electricity bill and another to pay water bill. No one counts how many people have died doing that.

To speak of banks only, I have rarely got my intended work done in any bank, public or private, without standing in que for good amount of time. I could remember 2-3 instances at max from top of my head. So I also do not understand this whole business of "having to stand in que in Banks". Specifically in this DeMO period, I got my money deposited/exchanged/withdrawn (went twice) from SBI in about average time that I anyway spend when I go to SBI otherwise.

[shiv]

Over the past 4 weeks I have installed and uninstalled several wallets on my andhroid/andhra-ite phone.

In my view Paytm is by a long shot the best and it is going to be a while before any GoI initiative and PSU bank can come up with something like it in terms of reach.

Canara bank - my regular bank for 40 years has the worst apps - the pits. the UPI app is worthless. The Mobile wallet app looked interesting. To make payments I clicked on a menu and expected to see a long looooooooong drop down list like Paytm. I got exactly 2 names of vendors who accept payments from Canara wallet in Bengaluru

• 1. Achal Cashew center
  2. Apollo pharmacy

Try and beat that for convenience

The other wallet that i found useful and working from the word go was ICICI's "Pockets" app. I like it and it also offers me something that tickles me no end. The wallet app comes with a physical VISA card (if you want one) and that card can be used like any Credit card in case phone paymets are unavailable. Best part is that even if misused or lost the maximum damage that you will get is what you have in your wallet - I keep less than 2 k normally. Unlike my credit card which once scared the crap out of me. After paying for Aero India 2013 tickets I got an SMS that said "Thank you for using your Citibank card for purchasing 2 tickets from Berlin to New York. You have been charged Rs 23,000 only" That was one trip I did not enjoy.

It will be a while before UPI apps take off. There is some major confusion about Aadhaar linking. I enter my Aadhaar number for every bank account I have and this screwed things up a bit.

The USSD application (Internet not required) worked once for me. As of yesterday it is not working. It is more painful than standing in a queue.Please allow me to explain.

First you dial *99# and go through the registration process and get a login id

Finally when you get through the process of paying anyone is so irritatingly complex that no one can seriously use this outside in a shop or for an Auto. You need to sit down and have a 11 character IFSC code and 13 digit account number of the person you are paying - sending these serially after which you enter your id and password. Obviously for this you need to have the receivers bank details displayed in front of you. The process takes several minutes

This thing is not going to work soon. It is Ok to curse Paytm - but it is up and running and working well. Others have to play catch up. Those who wish for an early death of Paytm have probably not tried the available alternatives - or even Paytm itself perhaps

[uddu]

PVR Cinemas to Accept UPI Payments Across India
http://www.news18.com/news/tech/pvr-cin ... 28382.html

PVR Cinemas, the largest cinema exhibition company in India, today launched a Unified Payment Interface (UPI) for its 122 properties across the country. The option will enable customers to make online payments via UPI in addition to net banking, wallets and credit/debit cards.

"This will be the first large-scale roll-out of UPI by any cinema chain in India. All of pvrcinemas.com users will have access to making payments via UPI starting today," the company said in a statement.

[uddu]

There is another private app, that's gaining acceptance and probably compete against a private app like Paytm is this one
https://www.phonepe.com/en/index.html
and that's a UPI based app

[Ankar]

60 lakh depositors put Rs 7 lakh crore in banks, govt probing all of them

[pankajs]

Having said that, a limit on debit cards is a good thing, provided I can set it from net banking or an ATM. Gives one peace of mind in case the card gets stolen. At least with credit cards, one can dispute fraudulent transactions, but no such luck on debit card transactions.

So I too had the same issues with the card limit i.e it was too high for my comfort. I was asked for feedback on my banking experience with ICICI bank way back in 2009/10 and I suggested that they provide a way to limit the Debit card to as low as Rs 10k.

After a long time, ICICI bank did provide a way to manage the Debit card limit but the lowest I can dial down to is 50k. Still too high for my comfort.

Now with Pocket Card it is possible to carry just enough cash to get around and I usually let it drop till about Rs 200. It is possible to add money on the go through the Pocket app. I have tested it on my 2G network but at home. I have paid the last BSNL, Electricity and Mobile bill with this card and have used it once in Reliance Fresh.

There are 3 issue though.
1. Cannot use it at ATM to draw cash. I carry my Debit card with me just in case.
2. Money once transferred to pocket cannot be transfered back. No issues. Leaving some change on the card, I mostly transfer what I need just before I need.
3. Max you can carry on it is 10K and the max limit of transactions for a month too is 10K, IIRC. This is not an issue for me and I do carry my debit card with me just in case. Usually I do this just before I leave home but I have tested the pocket app on my 2G network but not on the road.

I would say the Card is an answer to my needs though it wasn't created in response to my request. It allows me to use the card at any place without having to worry about being my number being stolen/misused. Right now the Cash available on my pocket card is about Rs 540. Peace of mind.

[JayS]

This thing is not going to work soon. It is Ok to curse Paytm - but it is up and running and working well. Others have to play catch up. Those who wish for an early death of Paytm have probably not tried the available alternatives - or even Paytm itself perhaps

Indeed I haven't used much of those other options, neither PayTM. Simply because I so far never needed to. Debit/Credit card worked for me. Now when I needed it, I tried UPI and it works well for me - but it works alright if few of the conditions are satisfied for you a priori. And it starts from whether your bank has opted for UPI or not. If one has account in big banks it works like charm, but if you have some small or local bank then it could be a pain to start with. You need to have same mobile number registered with the bank to link accounts. For SBI you need debit card to generate MPIN (which I unfortunately don't have as it expired just recently and they sent new card on the old address in some other city, long story). Some apps are crap. I am not sure, how well their grievance system works in case something wrong happens with transaction (I read till now NCPI was manually handling cases which is obviously inadequate for full scale operations. Plus if you use third party app, who takes the responsibility of solving the issue - your bank, receiver's bank or the App provider?? ). Certainly it will take some time for UPI to iron out all the wrinkles.

To be fair, I said "Natural dead" (that too given what the post that I quoted was correct/true, because that blatant cheating), which is what I see for PayTM if they behave like this - you cannot transfer money back to your account whenever you want, customer care doesn't work properly, too much charges for transferring money to bank account etc.

And yes ICICI Pockets is good package, I feel too. But the other day we were trying to pay cab driver by bank transfer using IMPS (driver didn't have smart phone for UPI/PayTM) and ICICI iMobile was not accepting his account details as Payee. Pockets also was unable to do so. Only from Netbanking site we could add payee. But later at 2AM, it refused to transfer money. The transaction failed twice. Money got deducted (significant amount as it was 2day outstation trip), a lot of time wasted and it was difficult to send the anxious Cab driver back saying we will definitely pay next day. The person is yet to receive money for those cancelled transaction after 3 days. ICICI system does give trouble sometimes. Banks need to remove such glitches.