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If your definition of a smart city is the use of mobile payment systems then Hong Kong is actually much “smarter” than SH or SZ, simply because it already has a smart payment system some 20 years ago, called the Octopus card, which has a penetration rate of 99% amongst people of ages of 16–65 in Hong Kong - far higher than the penetration rate of any mobile based smart payment system.Briefly the Octopus card is a contactless rechargeable payment card that is being used to pay for public transportation; purchases in restaurants, fast food shops, supermarkets, convenience stores; school fees; online shopping; bill payments; car parking; peer to peer payment for splitting a restaurant bill; postage; charitable donations; small medical expenses… even as a door-entry system for apartment blocks and monthly passes for transportations and health clubs - in fact nearly everything connected with one's daily life. The only things I could think of offhand that do not accept the Octopus are HK taxis, Uber and high end fine dining restaurants. The Octopus card has been offering an automatic electronic top-up service via bank accounts or credit cards from 1998. With this payment system already in place for such a long time in HK, most mobile payment systems such as Apple Pay, Samsung Pay, Google Pay are finding it difficult to penetrate the market and usage of them is very low. Most HKers has an Octopus card in their pockets and payments are made by whipping out the card and touching a sensor - no fumbling with your mobile phones, no logging in, no password or fingerprints, and no credit card authorization needed, no worries of mobile phone running out of batteries… you get the drift.Therefore, the low usage of smartphone payment systems in HK is actually not an indication of it not being a smart city. On the contrary it has been smart years ago, certainly long before SH or SZ.Another thing I'd like to point out is that the two reasons why mobile payments flourish in the PRC is bacause credit cards are out of reach to most people in China due to the late development of the credit card market/system in China, as well as the nonexistence of a credit scoring system, and the high entry requirements of credit cards. So most people simply cannot get one. That's where systems like AliPay and WechatPay (they are linked to one's bank account in China) come in to take up the void, acting like a mobile phone based debit card.The other reason smart payment systems flourish in China is that the government actually encourages them, for the simple reason that they can keep track of its people. Imagine you're a fugitive and you use WechatPay to pay for a can of drink - your location is exposed. On top of that if you use WechatPay to transfer the money you robbed to your accomplice, your accomplice is exposed. Now imagine you are a corrupt government official. The government can track your money or even freeze your money simply by calling WechatPay instead of having to call hundreds of banks to search for your bank account and then order that bank to freeze your money. Finally, image you're a small business owner and people pay for your goods with AliPay because it's so convenient. You have the convenience too of not having to handle a lot of cash. How wonderful. But, your daily revenue is now recorded electronically, so the taxman will certainly know how much tax you should pay… oops…Note that HK taxis do not accept the Octopus because they do not want to forfeit the loose change (eg. Passengers incurring a $36.6 fare would usually pay $37 and leave the penny change), not because of lack of trying by Octopus. HK taxis also do not accept credit / debit cards mainly for the same reason.

What is the penal action by UIDAI?Unique Identification Authority of India (UIDAI) has temporarily barred Bharti Airtel and Airtel Payments Bank from conducting Aadhaar-based SIM verification of mobile customers using eKYC process as well as e-KYC of payments bank clients.The action follows allegations of Bharti Airtel using the Aadhaar-eKYC based SIM verification process to open payments bank accounts of its subscribers without their ‘informed consent’. UIDAI also took strong objection to allegations that such payments bank accounts are being linked to receive LPG subsidy.This essentially means Airtel would not be able to, in the interim, carry out ‘electronic-verification’ or link mobile SIMs of its customers with their 12-digit biometric national ID Aadhaar through the efficient and paperless eKYC (or electronic Know Your Customer) process of UIDAI.Also, Airtel Payments Bank will not be able to open a new account with Aadhaar e-KYC. However, accounts can be opened through alternate methods, if available.Why was this extraordinary step necessary?More than 23 lakh customers have reportedly received as many as Rs47 crore in their Airtel bank accounts, which they did not know had been opened!Sources said it was brought to the notice of the UIDAI that at the time of mobile verification using Aadhaar e-KYC, the Airtel retailers were also opening Airtel Payments Bank accounts, without consent of the user. Government LPG subsidy was also getting transferred to these accounts, without their consent.UIDAI observed that as per agreement with the authority, Airtel and Airtel Bank are duty bound and under obligation to ensure security and privacy of residents’ identity information. Security and privacy of Aadhaar data is a highly sensitive matter and the Supreme Court is looking into its various aspects. Suspending the ‘e-KYC licence key’, UIDAI ordered PricewaterhouseCoopers to conduct an audit of Bharti Airtel and Airtel Payments Bank to ascertain if their systems and processes are in compliance with the Aadhaar Act.The temporary ban may be made permanent if the audit finds gross and wilful violations.UIDAI may consider revocation of suspension or decide further necessary action upon receipt of the report. The alleged actions of Airtel and Airtel Payments Bank were found to be in violation of different sections of the Aadhaar Act, 2016, which mandates obtaining explicit consent of the individual. Violations are liable to be punished with Rs1 lakh per day fine and termination of authentication user agreements.Both Bharti Airtel and Airtel Payments Bank were appointed as Authentication User Agencies (AUA) by UIDAI and had entered into an agreement with UIDAI in February 2015 and September 2016 respectively for the purposes of availing authentication services provided by the authority.So, how exactly did Airtel pull of this trick?When UIDAI reviewed the Airtel mobile app, it found that when the app is opened, along with the welcome message a pre- ticked consent box is momentarily flashed on the screen which states “Upgrade or create my Airtel Payment Bank wallet using existing Airtel mobile KYC.”This was found to reflect blatant disregard of Aadhaar Act and Regulations.1The bank was the first applicant to receive the final licence from the Reserve Bank of India (RBI) in April 2016. Kotak Mahindra Bank holds 19.9% in the Airtel Payments Bank.According to RBI guidelines issued in November 2014, a payments bank will maintain cash reserve ratio with the central bank. Apart from it, they will be required to invest minimum 75% of their deposits in statutory liquidity ratio eligible government securities with maturity up to one year and hold maximum 25% in current and time deposits with other scheduled commercial banks for operational purposes and liquidity management.Airtel Payments Bank reported deposits of Rs 68.33 crore at the end of the financial year ended 31 March 2017, which was its first year of operation, according to its annual report. It’s top 20 depositors accounted for around Rs 20.45 lakh (around 0.3% of total deposits), which is probably a function the Reserve Bank of India limiting deposits in Payments Banks to Rs 1 lakh.In September 2017, Airtel Payments Bank became the first payments bank to get on the Unified Payments Interface (UPI). Shashi Arora, MD and CEO of the bank said at the time that this would allow their 20 million customers to create their personalized UPI handles on the Airtel app, and enable them to make digital payments in both the offline and the online space.It appears now that Airtel Payments Bank may become the first payments bank to lose its license. The company has a lot of explaining to do in the coming days.Where does Airtel’s defence appear shaky?On Nov. 30, this is how Airtel defended itself:“Airtel Payments Bank is fully compliant with all guidelines and follows a stringent customer onboarding process. Airtel Payments Bank accounts are opened only after explicit consent from the customer. A separate consent for Direct Benefit Transfer is taken from all customers. As per the latest guidelines, DBT amounts are automatically credited to the most recent Aadhaar linked bank account of a customer. If the Airtel Payments Bank account is the latest Aadhaar linked account opened by a customer, the DBT automatically gets routed to it.Airtel Payments Bank customers are duly notified about the subsidy credit via SMS and an automated call (available in 12 languages) saying ‘The govt. subsidy of Rs X has been credited to your Airtel Payments Bank Account’ and also as and when any interest amount is credited. The balance in Airtel Payments Bank Savings accounts can be withdrawn by customers at any Airtel Store or transferred to any bank account. There are no charges on the first cash withdrawal in a month.We continue to educate retailers and strengthen our processes to ensure transparency to customers and compliance with all regulations.”But there are certain issues with such an explanation.Explicit Consent vs. Informed ConsentA tick-box approach to consent is not legally acceptable, and the consent being taken isn’t really informed consent. People aren’t really aware of the implications of the consent that they have given to Airtel, and it probably hasn’t been explained to them in sufficient detail. Having terms and conditions and a tickbox just doesn’t work for users.The pace of signing upOnce the Department of Telecom (DoT), based on a misreading of the Supreme Court order for re-verification of mobile numbers, put a deadline for linking mobile numbers to Aadhaar numbers, it gave telecom operators an opportunity to do some “growth hacking”: opening up Payments Bank accounts while reverifying numbers.For customers, the fear that their numbers would be cancelled if they didn’t link it to Aadhaar, and the massive scare-campaign for this from telecom operators to speed up signing up – meant that customers were rushed into it.From June 9 this year till the end of October, over Rs 47 crore worth of LPG subsidy was credited to more than 2.3 million consumers’ Airtel Payments Bank accounts instead of their regular bank accounts, according to the National Payments Corporation of India (NPCI). And many of them complained. Customers only realised the implications after they stopped getting their LPG subsidy, which was diverted to their Airtel Payments Bank accounts: this is surely not what they had given consent for.To be fair to Airtel, they were merely exploiting a loophole. The subsidy was diverted to the Payments Bank account because of a ridiculous rule that doesn’t require consent: “as per subsidy transfer protocol, the LPG subsidy is transferred to the latest bank account of the beneficiary seeded with their Aadhaar.”Airtel said that it has around 20 million accounts and that the bank operation is seeing a throughput of Rs 1200 crore per month, in a recent earnings call. Some of this growth was hacked. And Airtel will now be made to pay for it.ET reports that the flow of cooking gas subsidy into Airtel Bank accounts, allegedly opened without customers' consent, has accelerated with cumulative subsidy deposited in these accounts rising to Rs 168 crore at November-end from Rs 47 crore three months ago.State-run oil companies and the oil ministry have written to Airtel, Department of Financial Services and National Payments Corporation of India (NPCI) about this, but that hadn't helped – so far.In its latest communication to NPCI, a state-run oil company has again requested deseeding of Airtel Bank accounts and reversal of such deposits to customers' conventional bank accounts, which had previously received subsidy. NPCI maps bank accounts with Aadhaar and oversees retail payments and settlement systems in the country.The public sector oil companies have alleged that the bank opened accounts of most of these customers without their consent, leading to immense inconvenience to them since many of them aren't familiar with digital transactions and lack knowledge of using the subsidy lying in their accounts.Who do the Payment Banks compete with?Paytm recently launched their payments bank. With that, there are four payments bank in India - Paytm Payment Bank, Airtel Payment Bank, India Post Payments Bank and FINO Payment Bank. The payments bank is like normal banks; it performs almost all banking operations but doesn't engage in any credit providing service and functions on a rather smaller business scale compared with other banks.They compete with each other, but they also compete with the traditional banks. This is how they attempt to attract customers:Interest rates: The standard interest rate for commercial banks range from 3.5 - 6%. As of now, Airtel payments bank is giving the highest interest rate of 7.25% which is a very attractive rate compared to other commercial banks. Paytm's bank offers an interest rate of 4% on savings account and 7% on FDs whereas, India Post payments bank is offering between 4.5 - 5.5% for savings account. Some other small scale commercial banks such as RBL bank offers interest rate of 7% and Yes bank offers interest rate of 6.25% but that too depends on the deposit amount.As per the RBI guidelines, payments banks cannot lend they can only take deposits or accept payments. Banking experts believe by offering higher interest rates on deposits competition in this sector is expected to rise.Minimum Balance: Most banks levy a charge on their customers in case one fails to hold a minimum balance in their account. Among payment banks, Paytm payments bank came up with zero balance account where no minimum balance needs to be maintained. Most traditional banks charge for not maintaining minimum balance.Charges: Normally banks charge a certain amount of fees for online transactions, and so is the case with most payment banks. Among payment banks, India Post payments bank charges Rs. 5 for IMPS and NEFT is free of cost. For online transfers within the bank, Airtel payments bank doesn't charge anything; otherwise it charges 0.5% of the transferred amount. For every online transaction Paytm payments bank is not charging anything, all fund transfer services like IMPS, NEFT and UPI online transactions are free of cost.Different payments banks charge differently for cash withdrawals. Paytm payments bank follows the standard RBI rules of cash withdrawal, with charges similar to all other commercial banks in India. For the same, Airtel payments bank charges 0.65% of the withdrawal amount; India Post payments bank doesn't charge any fee for withdrawals made from their own ATM or any Punjab National Bank's ATM – for all others it too follows the RBI rules.Process: The application process of payments bank is much easier than that of other banks. These bank accounts can be opened instantly through their respective mobile apps just by providing details like Aadhar number with KYC verification.India Post payments bank offers a free debit card with annual maintenance fee of Rs. 100 from second year. Paytm payments bank is also offering digital debit card for free and an annual subscription charge of Rs.100 for the physical card. It is also providing its customers with checkbook for Rs. 100.

To Ian Alter, Lani Hadfield, and Yousuf Farhan (account banned), and Denise Murray,I live in the States, where paper checks are still a “thing” though not as vibrant or ubiquitous as they once were. (By contrast, Dr. Julia MacDonald Ogilvie tells me Germany doesn’t use checks/cheques anymore.)In fact, one way I discovered someone had forged checks on my account recently was when I was updating my (paper!) checkbook by comparing and verifying transactions online. Hmm — I saw a check written to a local grocery store but authorized through TeleCheck because the crook somehow had my account information (even though the check itself didn’t even have my name or address on it; it was either his, or another victim’s). The problem? I haven’t written checks at that store for decades, I rarely shop there except for emergencies, and even then I’ll use cash or a credit card. That started a long process to catch the thief. He was wanted in at least one other county for writing fake checks. I filed a police report, but was never told what happened.Although I write far fewer checks now than I ever did (only 40 checks in 2018), I find checks are still a viable option for me when I don’t have cash on hand or cannot use electronic means to pay for something. Some companies actually charge a fee if I pay my bill online, so I mail them a paper check. Some people won’t or can’t accept credit cards.Below are the payment methods I know. The only one I do not use is a debit card due to its inherent risks. I have rarely used cashier’s checks, because I have a checking account — with paper checks — and my checks are free to use, unlike cashier’s checks. Each payment option below is still useful for someone.BarterCashPaper checksCashier’s checksDirect depositsBank transfersMobile paymentsElectronic bill pay (either automatic or manual)Debit cardsAutomated teller machine (ATM)Credit cardsPrepaid cards (e.g., gift cards)Here’s another answer I wrote: Sarah Madden's answer to Why do some people prefer to use paper checks now that electronic payment methods are available?For the young ’uns out there, below is a graphic I created to illustrate what a paper check looks like.—Sarah M., posted 17 Feb. 2019 (updated 7 March 2019)QUESTION: Have bank checks/cheques largely outlived their usefulness?