
India's Plan to Bring Digital Banking to 1.2B People - elorant
http://www.bloomberg.com/news/articles/2016-04-10/india-s-audacious-plan-to-bring-digital-banking-to-1-2-billion-people
======
prebrov
Here's an anecdote about India.

They started requiring customer authorisation on all card transaction recently
(signature doesn't cut it and no Paywave for you). There were reports on how
that that forced Uber to use local payment gateway.

Anyway, couple months ago I was in Chennai, went to a restaurant with a
customer and when the bill came which customer didn't give me a chance to pick
up, they handed over a card AND a PIN number for the card.

I was shocked, naturally. The customer explained to me this is standard
practice and "a requirement" now for locally issues cards.

It isn't really, but since most terminals are wired and installed at the
checkout counter, Customers aren't invited to enter the PIN over at the other
end of the venue and aren't keen to, frankly. It is upper class who uses cards
for payments and psychologically and culturally they're expecting a full
service. Walking to the terminal to enter a PIN is a bit of a "walk of shame".

So, that's how best government intentions turn into known, en-masse and
country-wide security hole and a direct breach of banking service contract,
that requires customer to keep PIN private and waives any responsibility if
PIN is shared.

I would not at all be surprised if this 12-digit personal API ID will be
shared just as easily as a card PIN.

~~~
prebrov
Thanks for clarifying, peeps! As you understand, I'm selling it at what I
bought it for, merely retelling what I've been told. In this particular case,
bill was definitely more that $20 and to my knowledge, there was not 2-step
auth, just a notification.

I definitely seen it more than once and it also does seem to me that wired
terminals are still quite common, but I might be wrong since I, naturally, pay
with foreign bank's card and don't have to punch in a PIN.

Afaik, fully cloning a chip card is fairly easily done with a cloning device,
one of those you might have seen hooked up to an ATM.

And I'm happy that you guys seem to be content with the way things are. I'd be
totally paranoid having to share my PIN even once, ever. I mean, after that
some one should be able to withdraw tons of cash and after I see the
notification, bank would be in their full right to refuse reimbursement on the
grounds that I shared my PIN. And they'd be absolutely right.

Cheers!

~~~
softEngg
> I'd be totally paranoid having to share my PIN even once, ever. I mean,
> after that some one should be able to withdraw tons of cash and after I see
> the notification, bank would be in their full right to refuse reimbursement
> on the grounds that I shared my PIN. And they'd be absolutely right.

Well, most of us have a separate account for making small transactions like
these. Even if it gets misused I won't lose much.

------
apo
The plan is based on a national identity system with 80% penetration:

> So far, India's attempt to assign every citizen a unique 12-digit number
> associated with a person's unique iris, fingerprint or facial features, is
> succeeding—just last week, Aadhaar reached its milestone of registering 1
> billion people. With more than 80 percent of Indians enrolled, it gives the
> payments system a solid base to build on.

This reminds me of an article I read awhile back talking about the things that
technology has made disappear. Farms. Factories. Horses. Many diseases. And so
on. It ended with the question: what fixtures of current life are likely to
disappear in the future?

A commenter responded with one word: "privacy."

~~~
simula67
I held off for a very long time. I realized finally that if it is OK for me to
give these details to foreign governments ( for visa ) atleast I should not be
so uneasy about giving it to the Indian government which ( at least
theoretically ) have the responsibility to defend my interests.

~~~
mtgx
Banks can't arrest you for violating bogus immoral crimes. Your government
can. You should be much more afraid of the government violating your privacy
than your banks.

------
woodandsteel
Seems like India is leap-frogging way past where the U.S. financial system is.
On the other hand, I worry if all this personal ID data got hacked.

~~~
catchmrbharath
India is way ahead of the US financial system. I am a student here in US and I
can't really fathom how bad the US financial system is.

\- Intra bank wires / transfers are free and happen within 10s

\- Cheques are free

\- You don't have a system where you can lose all your money if you give your
handwritten cheques to somebody (who came up with echeques anyway?)

\- You don't get charged to have a checking account. They pay you interest for
your account.

\- Get a message about every transaction, every withdrawal that you do
immediately.

~~~
aptwebapps
I'm not going to argue against the general thesis that the US banking system
is antiquated, but I gotta pick these nits:

\- Checks are usually free in the US.

\- You don't usually get charged to have a checking account in the US.

\- The lack of interest on most US checking accounts is due to the very low
inflation rate and nearly zero federal rate. Adjusted for inflation, what is
the interest rate of your Indian checking account? Back in the 70s when
inflation was high in the US checking account that carried interest were not
uncommon. I do seem to remember that they were called something else, but I
can't remember right now.

~~~
catchmrbharath
\- You don't usually get charged to have a checking account in the US.

I have to maintain a minimum balance of 1500$ for the checking account to be
free.

>> \- The lack of interest on most US checking accounts is due to the very low
inflation rate and nearly zero federal rate. Adjusted for inflation, what is
the interest rate of your Indian checking account? Back in the 70s when
inflation was high in the US checking account that carried interest were not
uncommon. I do seem to remember that they were called something else, but I
can't remember right now.

Agreed. I got carried away trying to make a point :).

~~~
maneesh
Pick a different bank. Almost every bank I walk by offers free checking with
$100 balance, or even less

~~~
vinay427
Pick an even better bank and you have no fees, non-negligible interest, and
free ATM withdrawals with fee reimbursement worldwide. You'd have a hard time
finding many other banks in the world that offer that.

------
Nano2rad
People were forced to get UID by misinformation. The people were led to
believe it was compulsory. Only by intervention of the supreme court, the govt
was forced to admit it was optional. This was introduced undemocratically
without legislative back up with an executive order. An example of corporate
insensitivity to democracy. BJP pretended to be against UID before election.
Now they have conveniently forgotten their stand.

Now there is legislation for UID, but this was introduced by deception. It was
introduced as money bill in parliament, so that rajyasabha could not discuss
it(BJP has majority in loksabha). Money bill can only deal with govt finances
but it is now used to give approval for data collection, which needs
constitutional amendment in a real democracy. This is again undemocratic and
fascist. The stated aim of biometrics was to avoid duplication. but by
insisting on 10 fingerprints and iris, the real aim is data collection itself.
But they are really not sure UID biometrics is enough to avoid duplication,
there is condition like you can only apply for it once. UID is successful by
deception, ignorance, and undemocratic methods.

------
hackuser
Exciting, but I'm wary of journalism that presents no critical voices.

This was interesting:

 _Srikanth Nadhamuni, chief executive officer of Khosla Labs, said the best
way to think of the project is by comparing it to how shampoo was introduced
in India. Decades ago, most people couldn 't afford to buy an entire bottle of
shampoo, so Unilever, Procter & Gamble and other companies sold them in small
sachets that people could afford to buy, paving the way for marketing
everything from detergent to toothpaste in rural areas. Nadhamuni is betting
that the new digital payments system will be be low-cost, high-volume, like a
"shampoo-sachet revolution in the financial sector."_

Perhaps this tech could help with micropayments elsewhere.

~~~
x5n1
Funny reading that, multinationals introduced relatively useless products to
the masses using small quantities they could afford. The first hit is free.

This is more about control then actually improving anything. India still has
problems with terror that could be better tracked if all finances could be
scrutinized. Corruption too. If we can only get Pakistan to do the same.

~~~
hackuser
Why are toothpaste and shampoo "relatively useless"? I believe there are many
health benefits to using them.

I don't know for sure, however, because I've never tried going without them
for long ... let me know how that goes.

~~~
loeg
Shampoo is maybe useful. Some sort of soap + scalp action, occasionally, is
beneficial. Plenty of people in the west don't use shampoo or use it rarely.

You don't really need toothpaste. It's the brushing part that's good for
removing detritus from your teeth.

Edit: Downvote with no comment? How is this comment non-constructive, so I can
avoid doing it in the future?

~~~
hackuser
I didn't downvote you, but perhaps somewhat extraordinary claims require a
little evidence.

~~~
loeg
They aren't especially extraordinary claims.

[https://en.wikipedia.org/wiki/Shampoo#No_Poo_Movement](https://en.wikipedia.org/wiki/Shampoo#No_Poo_Movement)

[https://www.quora.com/How-much-less-effective-is-brushing-
yo...](https://www.quora.com/How-much-less-effective-is-brushing-your-teeth-
without-toothpaste)

------
Snargorf
I take it this plan is going to be executed by the 2% of Indian programming
graduates who are employable.

------
manifestdissent
In a country where genocide and sectarian violence are a regular occurrence†,
I am sure that a detailed database of religious affiliation, biometrics,
photographs, and addresses won't be misused.

Much like the Dutch census, history will look back at this registry of
citizens with horror.

† [http://time.com/3545867/india-1984-sikh-genocide-
anniversary...](http://time.com/3545867/india-1984-sikh-genocide-anniversary/)

[http://www.theguardian.com/commentisfree/2014/apr/07/narendr...](http://www.theguardian.com/commentisfree/2014/apr/07/narendra-
modi-massacre-next-prime-minister-india)

[https://en.wikipedia.org/wiki/Graham_Staines](https://en.wikipedia.org/wiki/Graham_Staines)

[http://www.bbc.com/news/world-asia-
india-30288169](http://www.bbc.com/news/world-asia-india-30288169)

[https://en.wikipedia.org/wiki/Anti-
Christian_violence_in_Ind...](https://en.wikipedia.org/wiki/Anti-
Christian_violence_in_India)

[https://en.wikipedia.org/wiki/Violence_against_Muslims_in_In...](https://en.wikipedia.org/wiki/Violence_against_Muslims_in_India)

~~~
urmish
Since you conveniently decided to not show violent acts against Indian Hindus,
here are some links on Anti-Hindu violence for sake of completeness.

[https://en.wikipedia.org/wiki/Christian_terrorism#India](https://en.wikipedia.org/wiki/Christian_terrorism#India)

[https://en.wikipedia.org/wiki/Category:Islamic_terrorism_in_...](https://en.wikipedia.org/wiki/Category:Islamic_terrorism_in_India)

[https://en.wikipedia.org/wiki/Religious_violence_in_India#Re...](https://en.wikipedia.org/wiki/Religious_violence_in_India#Religious_violence_against_Hindus)

[https://en.wikipedia.org/wiki/Ethnic_cleansing_of_Kashmiri_H...](https://en.wikipedia.org/wiki/Ethnic_cleansing_of_Kashmiri_Hindus)

[https://en.wikipedia.org/wiki/Persecution_of_Hindus](https://en.wikipedia.org/wiki/Persecution_of_Hindus)

Mostly Islamic terrorism
[https://en.wikipedia.org/wiki/Terrorism_in_India](https://en.wikipedia.org/wiki/Terrorism_in_India)

[https://en.wikipedia.org/wiki/Category:Violence_against_Hind...](https://en.wikipedia.org/wiki/Category:Violence_against_Hindus)

[https://en.wikipedia.org/wiki/Anti-
Hinduism](https://en.wikipedia.org/wiki/Anti-Hinduism)

~~~
dominotw
I think GP was pointing out the fact that people in power are infact hindu
nationalists who can misuse power. Islamic terrorists are not in power, hindu
nationalists are.

~~~
urmish
I didn't know opinion articles from The Gaurdian count as facts. The other
wiki pages about Christian Church burning has no link to the government in
power. Not sure what the implication was there. The Sikh riots did not have a
religious motivation, rather a fallout of operation Bluestar and the resulting
assassination of Indiri Gandhi (A congress leader, the party which is
supposedly far left on cultural issues. Their party members killed 2500+ Sikhs
in 1984.) Not sure what the connection to BJP there was either.

According to this:

[https://en.wikipedia.org/wiki/Assault_on_T._J._Joseph](https://en.wikipedia.org/wiki/Assault_on_T._J._Joseph)

it was a Muslim who cut off a Christian professor's hand in South India. His
wife committed suicide because he was fired. Of course BBC, Gaurdian,
Firstpost and all other far left websites will not report this. On censorship
happy sites like HN and reddit they have successfully created massive
propaganda against the Indian government. I can spout nonsense as facts too.
Here are example of some 'facts' for you then:

Maybe Obama is a Muslim according to this:
[http://www.conservapedia.com/Obama's_Religion](http://www.conservapedia.com/Obama's_Religion)

Maybe Merkel is a traitor according to this:
[http://www.breitbart.com/london/2015/10/29/hundreds-
germans-...](http://www.breitbart.com/london/2015/10/29/hundreds-germans-
trying-bring-treason-charges-angela-merkel-migration-policy/)

Maybe Bernie Sanders is a communist according to this:
[http://nypost.com/2016/01/16/dont-be-fooled-by-bernie-
sander...](http://nypost.com/2016/01/16/dont-be-fooled-by-bernie-sanders-hes-
a-diehard-communist/)

OP is parroting the conspiracy theory that millions (still a small % compared
to India's billion+ population) do because they cannot digest seeing Modi in
power. I can go full conspiracy mode and point out who owns left wing media
outlets but I don't think HN is a place for such discussions. There are
hundreds of report of Hindus being killed in minority rich areas in India, but
unfortunately these incidents aren't covered in BBC and Gaurdian because
Hindus are a dying majority in India.

~~~
j0e1
>because Hindus are a dying majority in India.

Curious what you meant by that. Care to explain?

~~~
nindalf
Hindus have always been the majority on the Indian subcontinent (around 90%),
similar to how the majority of Americans (after the 1700s) have been white.
The prime worry of the Hindu population seems to be that gradually they would
represent smaller proportions of the overall population. The reasoning behind
this is that although you can convert to other religions, it isn't possible to
convert to Hinduism. In 1951 Hindus were 84% of the population. In 2011, that
had dropped to 79%. [1]

With the loss of majority status, it becomes difficult to dominate the
political discourse like Hindus do today. Just like how it was impossible to
think of a non-white person becoming President of the US, it is also
impossible to think of a non-Hindu holding any serious power in India for the
foreseeable future.

Note for those unfamiliar with India - the language Hindi is unrelated to the
religion Hinduism. Its possible to be a Hindi speaker and not a Hindu and also
possible to be a Hindu and not a Hindi speaker.

[1] -
[https://en.wikipedia.org/wiki/2011_Census_of_India](https://en.wikipedia.org/wiki/2011_Census_of_India)

~~~
rrrazdan
It is always possible to convert to Hinduism. There is no authority that
decides if you are Hindu or not. You just are if you believe that you are.

Lets I digress. You can be a Hindu today if you want. Just start incorporating
Hindu philosophies in your life. Choose an atheist one if you like.

PS: Not advocating anyone to convert to Hinduism. In fact I think that the
lower castes should abandon Hinduism if the upper castes don't reform fast
enough.

------
known
[http://financialaccessatbirth.org/](http://financialaccessatbirth.org/)

------
MikeNomad
Audacious plan? That would be getting their 1.2 Billion people reasonable
access to fresh water and indoor plumbing.

~~~
urmish
So any other plans should be put on hold while doing this?

Access to sanitary facilities has been one of the prime agendas of Modi's
elections and he is delivering on it too.

[http://qz.com/505276/narendra-modis-most-popular-move-so-
far...](http://qz.com/505276/narendra-modis-most-popular-move-so-far-sending-
millions-of-indians-to-the-toilet/)

~~~
MikeNomad
Sigh. No, I did not suggest that all other initiatives should be put on hold.
The pivot, fulcrum, etc. for my comment was the use of the word "audacious" in
the article title. Since the use of brevity has... muddied the waters:

I don't think the deployment of yet another digital payment method that allows
for the highly centralized storage of personal information, in a country that
does not yet have enough toilets (yes, there is an initiative under way) or
reasonable access to fresh water, qualifies as audacious.

I suppose I may have pulled up short on the Audacity Scale by copping low with
sewage and water, instead of mentioning crime and air pollution.

Of course, YMMV.

