Apart from cash and debit/credit cards, India has two other modes of payment both online and offline.
1. Digital wallets
Famous digital wallets in India are PayTM and MobiKwik.
How they work:
i) You add money to your digital wallet from your bank account.
ii) Pay offline using QR codes or online from your wallet.
After demonetisation of the Indian rupee in 2016, PayTM launched a nationwide campaign due to which it became extremely famous offline.
The similar wallet in China is WePay from WeChat. It is used more than cash in China. (I know its true, if someone can help me with the proof )
It is something similar to how Lightening Network will work for Bitcoin, so citizens of India and China already know how the experience would feel.
UPI (Unified Payments Interface)
The Reserve Bank of India saw that individuals/merchants wanted efficient means to transfer Rupees online and digital wallets were fulfilling that need. Hence, they launched UPI. UPI helps you transfer funds directly from your account to another account in seconds.
How it works:
- Ask the other individual/merchant for their UPI Id. (Similar to email ids - 123456@upi)
- Transfer the amount to the address.
Its that easy. No need for wallets. No need to add beneficiaries and wait. No bank hours. Purely instant.
Many a times it becomes difficult to explain the need of Bitcoin to friends as they just counter me by asking - “Isn’t that UPI?”
Both, digital wallets and UPI are accepted widely by merchants offline in India - be it for smokes, groceries, coconut vendors etc.