“When fintechs are small, operate in a grey area and no one comes and asks you to stop… But once you are significant then you will be stopped. There has to be a governance layer if you’re in financial services right from the start. Technically we have all the platforms whether UPI or OCEN to innovate on. And there’s no need for fintechs to operate in grey areas,” Asbe said at an industry event in Bengaluru.
Over the last year, the Reserve Bank of India (RBI) has introduced several changes to bring new age financial companies across digital credit and payments under the regulatory fold.
Asbe, who was speaking at an event organised by payments tech player Pine Labs, said from a brand recall and offers perspective, NPCI-operated card payments network RuPay is the second biggest brand in the country. RuPay currently competes with the likes of global payment giants Visa and Mastercard.
The NPCI chief, who was in conversation with Pine Labs chief executive Amrish Rau, said that currently there was still room for digital payments to scale up.
“We still have a 10x scale to achieve. But the question for us is whether we can do it in the next 18 months. NPCI is still very slow … We are the number two brand in cards now,” said Asbe.
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When asked about monetisation of UPI, Asbe said, “The objective for UPI was to let it be a common denominator to accept payments. Even a small charge creates friction. However, the good news is that there’s a scale and that the fintech ecosystem should see UPI as an infrastructure play.” He added that it was time for value-services on UPI to start generating revenues.
“You have the base now, but the question is how will you leverage the layer to build revenues from this service,” he said.
One of the main contentions of Indian fintech firms over the past few years has been the zero merchant discount rate (MDR) regime for UPI and RuPay debit card transactions, which was announced by finance minister Nirmala Sitharaman starting December 2019 to grow the acceptance of digital payments.
Asbe’s statements come at a time when transactions on UPI have touched 8 billion total in January and 7.5 billion in February.
Over the past month, NPCI has also been pushing UPI Lite, focused on small ticket transactions; and RuPay credit card on UPI, to link credit cards with UPI payment rails.
Asbe said that daily spends on RuPay Credit Card on UPI have crossed Rs 2 crore. “We want to cross Rs 100 crore in a few weeks,” he added.
Recently, the Monetary Authority of Singapore announced that the integration of India’s UPI and equivalent network in Singapore, known as PayNow, will begin anytime soon, which in turn will reduce the remittance cost by 10%.
“Cross border is where the interest is. Over the next few years India will be sufficient on cross-border payments and remittances,” Asbe said.
