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From: Adrian Gropper
Sent: Tuesday, March 12, 2024 3:40:38 AM
To: ProjectVRM list ; technical-discuss@lists.openwallet.foundation
Subject: [projectvrm] Identity in India - Payments
This is my second post now based on three weeks of travel in India. The first was mostly about identity in the sense of (state) security. This one is about commerce and is cross-posted to OWF and VRM.
As a foreigner, paying for things in India before and during the trip has been a constant problem. In two cases, it was impossible because the largest cell service provider, AirTel, and a government-run hotel network, MTDC, are both “cashless” but could not accept any US credit card in practice. The preferred payment processor in India is the UPI standard but that requires both a gov-run biometric Aadhaar identity as well as an Indian bank account. As far as I can tell, neither is accessible to a foreigner. This is how identity comes into payments.
I don’t know the details of UPI but I saw it in action when a native friend purchased something from a typical small vendor. The overwhelming majority of vendors ranging from AirTel to pushcart vendors display a QR code that a customer can scan with their UPI app. The salesperson then uses their smartphone app to scan a QR code on the customer’s smartphone. The transaction is confirmed in seconds and the purchase complete.
The identity questions are:
- Why bother with the card displaying the QR code instead of just having the salesperson display a QR code from their phone? and,
- Why can’t I use my BTC and ETH wallet and skip UPI in a clearly decentralized transaction?
As best I can tell, the issue is more likely taxation and fraud rather than KYC. (I suspect money laundering is a separate issue when large transfers can be done via tumblers already.)
In the Open Wallet and VRM context, Web3 and central bank digital currency seem clearer to me now. What’s needed is a way to prevent the vendor from evading taxes and the salesperson from pocketing the digital cash. It’s not obvious to me how either VCs or DIDs fit into this picture.
Adrian
