WhatsApp digital payment platform set to fail

WhatsApp is about to support digital payments in India.
WhatsApp is a messaging platform used throghout the world. In India (it seems) the government has arm-twisted WhatsApp to support digital payments. Indian government thinks that by this action, digital payments will increase in India.

People pay by cash in India because

• Taxes are high
• Government regulations are high.

Whether WhatsApp supports digital payments or not, these facts are not going to change. So WhatsApp digital payments platform will have limited success like Paytm, FreeCharge, etc.

Here is an example. India levies an import duty of about 10% on gold. In local Indian market, gold is sold at about 5% more than international price. This means that almost all gold being sold is smuggled. The seller wants cash for gold. The buyer also prefers to pay cash because if a digital payment is made, then

• taxes will have to be paid.
• PAN number will have to be revealed leading to potential harassment from income tax officials.

If India wants to go cashless or less-cass, then

• Reduce taxes
• Reduce regulations

More and more people will then adopt digital payment for convenience.

Economic collapse

World debt is in Trillions of dollars; derivatives are in quadrillion of dollars. Should a major bank fail, like dominoes, other banks will fail. The world financial system is unstable. A economic collapse will likely occur during the next few months.

Here is what I expect to happen in India during the collapse:

• Stocks will fall by more than 15%.
• Rupee will fall by more than 5%.
• Real estate will continue to fall or (at best) remain at same prices.
• Gold and silver will rise.
• Indian government will attempt to steal people's money by doing one or more of following actions
  1. If you have lot of money in your bank a/c, then (unless you can prove that it is white) a part of that money will be taxed.
  2. Cash withdrawals will be reduced (by making rules) and/or taxed.

How to protect yourself from Government snooping?

New documents release from Wikileaks provide proof that government can read our emails, SMS, WhatsApp messages, Videos, photos, etc. The government can switch on the microphone/camera in our phone/computer/Laptop/TV for snooping, even if the device is supposed to be sleeping/switched off.

To protect yourself,

1. Use cash or some crypo-currency like BitCoin for transactions that you want to be hidden.
   Cheques, cards, UPI, etc can be tracked by government.
2. Use peer-to-peer server-less messaging application like BitMessage.
   WhatsApp, Facebook messenger, Google Hangouts, Microsoft skype, etc can be tracked by government.
3. Don't permanently attach a microphone or camera to your desktop computer. Attach them when needed and then disconnect them.
4. Keep a tape over the camera of laptop. This way the government can hear us, but not see us.
5. Switch off your TV/computer/Laptop at night or when unused for long periods.
6. Keep multiple phones. Consider using a basic phone for private calls, one smartphone for business, one smartphone for personal use, etc. The basic phone has limited features (no GPS, no camera) and hence is more difficult for Government to automatically switch on microphone, track GPS, snoop on videos, etc.
7. Use Tor browser or Tails bundle for surfing sites that you want to be private.

Corruption in India

Transparency International conducted a survey in India to find perception of Indians regarding corruption. These are the results:

• 85% of police is corrupt
• 84% of government officials are corrupt
• 79% of business executives are corrupt
• 76 to 78% of politicians are corrupt
• 74% of tax officials are corrupt
• 71% of religious leaders are corrupt
• 66% of judges are corrupt

The least corrupt countries in world are Denmark, New Zealand, Finland, Sweden and Switzerland.
The most corrupt countries in world are Somalia, South Sudan, North Korea, Syria and Yemen.
India is ranked at rank 79 among 176 countries evaluated on transparency. (Rank 1 means least corruption and most transparent. Rank 176 means most corrupt and least transparent.)

Corruption is dominant in India because taxes are high and their are many unnecessary rules/regulations. When taxes will be reduced and most rules/regulations eliminated; then India will be become less corrupt.

UPI payments in India

UPI has the advantage over Paytm, FreeCharge, etc because

• UPI directly debits/credits your bank a/c.
• UPI is supported by Government of India. The government forces banks to charge little or no fee for transactions. Also the government makes rules, so that UPI is accepted in many places.

Hence prefer UPI.

To use UPI, you have 2 choices

1. Use BHIM app from Government of India. This is the only practical option, if you have a/c with a government bank like SBI, OBC, etc.
2. Use App of your bank e.g. ICICI has iMobile app. This App will usually give you more features than BHIM and will be faster. This option is available only from private banks like ICICI, HDFC, etc.

You can install both BHIM and private bank UPI app on one mobile.

Payment by UPI will continue to grow in India, primarily because the Government of India is forcing merchants, organizations, businesses, etc to accept UPI.

As a general guideline, the order of preference is

1. Use cash, if possible. This will have maximum privacy.
2. Use Credit card for online shopping because payments can be deferred by few months and refunds are convenient.
3. Use UPI e.g. while paying to a friend, when exact cash is not available; cheque is inconvenient; not POS machine is available.

Cash Withdrawals in India

With effect from 1-Mar-2017

• 4 free cash transactions (withdrawal and deposit total) are allowed per month per savings account.
• A charge of ₹150 will be levied per cash transaction after the free transactions.
• Upto ₹2,00,000 value of cash transaction (withdrawal and deposit total) are allowed per month from home branch of bank.
• After the free cash transaction value, a charge of ₹5 per ₹1000 will be levied for cash transactions.

To combat these rules, Indians should

• Have savings account in different banks.
• Withdraw ₹2 lakhs cash per month per savings account.
• Withdraw cash by going to bank personally.
• Don't withdraw from ATM, because ATM limits is much lesser.

Cash means privacy and freedom. Accept cash and pay cash wherever possible.

Indian budget 2017 - The good, bad and ugly

A good budget

• Reduces taxes
• Reduces deficit by cutting subsidies
• Reduces bureaucracy, rules and regulations
• Gives more freedom to people.

So here are the highlights of budget 2017

• No cash transaction above Rs 3 lakhs. Bad because it reduces freedom. People should decide the mode of payment, not government rules.
• Mahila Shakti Kendra for welfare of women to allocated Rs 500 crores. 60 days interest waiver for farmers. MGNREGRA allocated Rs 48,000 crores. Ugly because government subsidies are mostly wasted.
• Tax rate for people earning between 2.5 to 5 lakh brought down from 10% to 5%. Good.
• Foreign investment board abolished. PSEs like IRCTC to be listed. Good. Lesser the bureaucracy, the better.
• Cash donation to political parties curbed at Rs 2,000. Good.
• Higher taxes for rich. Bad.

Overall the budget doesn't do anything significant. So the Indian economic conditions will remain mostly the same i.e.

• Large scale corruption
• High inflation
• Lack of skills to compete globally
• Rupee will continue to fall in value against real money i.e. gold/silver.