Since 2016, there was a transformational change in the way India transacts. National Payments Corporation of India (NPCI) developed the Unified Payments Interface (UPI) which made its way into the payment system and since then has been the way of life for every citizen with a smartphone and bank account to make quick and safe payments.
Praveena Rai, Chief Operating Officer, National Payments Corporation of India (NPCI) discusses the payments success model, Open Network for Digital Commerce, the rise of payment aggregators, acquirers, and the way forward.
UPI transforming the way industry transact
Speaking to ET INSIGHTS, Praveena Rai, Chief Operating Officer, National Payments Corporation (NPC) said “In my opinion, both AADHAR and Unified Payments Interface (UPI) have created a successful model of citizen-scale infrastructure. The players in the payments industry have tasted success that can be achieved through this model that is fully driven and completely interoperable.”
So, this model, moving into other zones, the recent announcement of Open Network for Digital Commerce (ONDC), an initiative aimed at promoting open networks for all aspects of the exchange of goods and services over digital or electronic networks looking at e-commerce, on similar lines slightly evolving model. These are two such models and as we look at similar kinds of models, we will see many more of these platforms coming up and opportunities to do this will be present in different industries., she added.
The govt. has announced Health Stack, Education Stack, and like of it will have their components. These components will have their structuring and UPI will align with them.
End-to-end digitization enhancing credit line facility for the MSME
Praveena Rai said “When we speak about opportunities in credit, we speak a lot on the retail side. Looking at the business side, especially the MSMEs, there is need of immense trust is needed and it is happening.”
The Ministry of Micro, Small, and Medium Enterprises (MSME) has a platform where every MSME gets registered which offers access to a lot of benefits and privileges. Any lender who is lending to this group becomes part of priority-sector lending targets, starting even on small-ticket sizes. For example, we have RuPay commercial card focused on small businesses, giving the credit lender the confidence to increase the credit line facility for such MSMEs, she informed.
“As the digital footprint increases and confidence builds up, it opens a lot of opportunities there. It also offers complete digitization across the supply chain.”
The rise of payment aggregators: digitally boosting credit footprint
Praveena Rai said “I think there is going to be a no. of players providing various kinds of payment mechanisms. Quite a few no. of the participants have already started out as payment aggregators, payment acquirers who understand the small merchant segments well and have started out providing credit lines to those merchants.”
So, as we look at an increase in the digitization footprint, the credit footprint will also start building up, further added.