Payments in India – My observations and experience

To state the obvious, when you travel to a foreign place, one needs to know how you can pay for stuff – what the local currency is, the currency conversion, and of course the modus of payment. Most people especially from the west, would simply be used to making a payment with Visa / Mastercard Credit Card wherever they go. But not in India. In India, Visa / Mastercard is accepted in many places, and Cash is still king at most places. But, by far, the most common form of accepting payment I encountered during my travel was the UPI (Unified Payments Interface) based QR code system that’s everywhere. The success of UPI has been well chronicled and will be a case study of payments innovation at scale for years to come. In this particular post, I wanted to share what I saw at the grassroots level, and it is a tale of two different realities – what I saw vs what I experienced.

First what I saw at the – a few anecdotes from my own trip on how digital payments has become ubiquitous and democratized in India:

1. I was sitting at a beach in Pondicherry staring into the vast expanse of the ocean. Just then a beggar walked up to me and asked for money. I said in a very matter of fact tone – “I don’t have any money on me, I didn’t bring my wallet. “ Normally with this response, the person moves on. Not this beggar. Seeing my phone next to me, she responded to me in a very matter of fact tone – “so what you don’t have your wallet, you’ve got your phone. Just GPAY me the money.” I was flabbergasted for a few seconds.

2. I took a state operated bus from Chennai to Pondicherry. A couple of hours into the journey, the bus conductor walked past me to two guys in the front who both had to get off at the next bus stop, and the conductor owed them some change. He told them. “I have to give each of you 5 Rupees. But I have only a 10 Rupee note. I will give it to one of you, and you just GPAY 5 Rupees to the other person”. He said this and walked away nonchalantly. For a second, I was curious how these guys would react. What if one of the guys did not have a phone? What if one of them did not have GPAY? Why did the bus conductor just assume that these random strangers would be willing to do this? Isn’t the conductor obligated to hand them each back their respective change instead of having these strangers engage in a financial transaction? However, to my amazement, without batting an eye, the first guy opened his phone, and asked for the UPI ID of the second guy, transferred the money, flashed up the phone to show the confirmation; and off they went their separate ways. It was really that casual.

3. I was eating at a mall food court in Coimbatore. On my next table, a family of 4 was having their lunch as well. The boy, about 8 years old, shouted to his sister across the table – “hey, pass me the GPAY”. And he shouted this 3-4 times, as all annoying little brothers do. For a second, I thought to myself – what does it mean to pass the GPAY. As I turned around to see what they were referring to – the sister picked up the food receipt in front of her and passed it to her brother. I was astonished – GPAY is so commonplace in India, that in the minds of little kids in India (I am making a gross projection here of course), GPAY is used interchangeably with anything else that’s associated with the purchase activity (in this case the receipt).

4. At Hogenakkal water falls, I took a boat ride, parisal (coracle) to be precise. During this boat ride , many street-vendors turned river-vendors come on a boat and sell you stuff like Chips, Soda etc… Even these sail-away sellers accepted Paytm.

I have a few more examples from my trip, like a Pichavaram boat driver asking for me to GPAY the tip amount to him so he doesn’t have to carry the cash (as it might get wet), but I think these go to make the point. GPAY, Paytm, UPI are everywhere – it has truly democratized payments in India in every sense of that word. It all works flawlessly and beautifully at massive scale…if you are part of the system.

If you are not part of the system already (as in newly entering into this domestic payment setup), it’s very difficult – as was my experience. I had an Indian phone. I have an Indian NRE account which was setup for digital wallets, but yet there was hurdle after hurdle to get myself set up with GPAY or BHIM. My mom being a proud proponent of the Fintech innovation happening in India, and me being a payment geek – we tried, and tried hard, to get this to work. Alas, we couldn’t make it work even after trying for 3-4 days and after several calls to the bank; so, we gave up. Thankfully, I had an Indian debit card with me – which I was able to use at some places that accepted card and withdrew cash from time to time. In a land where payments innovation is happening at scale, I felt like fish out water. This was again my experience from May’23, and this personal anecdote could quickly change, and I hope it does.

I don’t know who needs to fix this – the bank, NPCI or wallet providers like GPAY, but I can say for sure that while they are operating flawlessly for the 99th percentile, I believe they can address the edge cases, and error handling and consumer messaging thereof in a better way to make it more seamless for foreign travelers who are looking to enter into the domestic payment setup for a brief few days.

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