‘More incentives needed to grow digital payments’

It is in the regulatory approval process right now. The RBI has cleared our proposal on the UPI to receive foreign inward remittance, very similar to IMPS or NEFT. We have started work to operationalise it in the next few months. UPI 2.0 has three main features: right now, the payments and business transactions work separately, and we plan to integrate the two.

Here’s a simple example: when I am collecting money from you, right now I cannot attach an invoice or a GST bill. In the revised process, you can send an attachment (an invoice, a GST bill, a restaurant bill), which you can verify and then pay.

Corporates will benefit from this because when they want to collect money from the consumer, if the invoice or declaration goes along with the payment, it will help consumers review that and then agree to the payment. For this, apps need to undergo some changes. As a result, to roll out this feature in full, it may take up to six months. The second feature is a signed intent and signed QR.

The signed QR will help build trust between the payer and the payee. BHIM QR-based payments can be used in P2P and P2M because of generic design adoption.

Consumers can generate a static or dynamic QR code, and then share the QR code with the other party by SMS or WhatsApp, which can easily be picked up by the other party’s app for payment.

This will push the digital way of sharing payment information in a big way. And the third feature is the mandate. We propose to add a fully revocable mandate, and it is under review, as I said. In this case, consumers would be able to add/update/delete the mandates authorised by them in the UPI-enabled app.

We are working on two things. The first is to increase the frequency for the digitally-active RuPay customer, and the other is to activate those who are not active on the digital platform. Recently, we partnered with Big Bazaar, where the RuPay consumer is incentivised to transact at its outlets.

We are also creating awareness that the cards can be used at PoS terminals because many customers are only active on ATMs. You will be seeing such merchant engagements in the coming days on the RuPay front.

We are also working on getting the National Common Mobility Card (NCMC) to become a single card with debit and offline prepaid or credit and offline prepaid features.

The same card will work at ATMs, PoS and even at metros/transit. We hope that in the next six months, we will have many banks issuing such combo cards.

I agree that ATM deployment has slowed down over the past few years. While there is a great push on digitisation, the need to grow the ATM network cannot be wished away. But they (acquiring banks) say the remuneration (interchange) to set up an ATM is not good enough. The matter is pending.

We have been making efforts to arrive at a consensus. But I think we, as a country, should increase the number of ATMs, as it is the first consumer interface to the electronic channel.

I think it has to grow much more, but obviously, physical asset deployment is not the right answer. That’s where the Bharat QR and BHIM QR will come in handy for banks and third-party acquirers to grow this market from 30 lakh to three crore.

Ultimately, banks and third-party players have to play a role in populating and educating customers and merchants. The work is happening, but it needs to be taken up on a war-footing.

We are a clearing house and have limited funds to do this activity since it requires huge funds. So, it is either the government or the banks that need to incentivise both customers and merchants. Our role is to provide the low-cost infrastructure to operate the digital payment systems.

The government has launched a customer and merchant cash-back scheme on BHIM UPI, and banks must take advantage of it.

Close to 10 lakh customers have benefited with an incentive amount of about ₹5 crore till date.

For a country like India, nothing is enough. If you want to grow the digital platform, there is a need for huge publicity on all fronts. Consumer awareness and incentives (for the short term) have to be scaled up, which will solve the huge on-boarding challenge.

We believe people like the UPI platform. But there are challenges, too, such as consumer awareness and dealing with cyber security issues. Everyone in the ecosystem has to keep working towards this, as no single player can deal with this alone.

The RBI already has set out guidelines on EMV migration, very similar to those of PoS machines, and the work is in progress. We believe that in the next year or two, you will see a lot of progress on that front. EMV migration is the answer to avoid counterfeiting.

We have been working on various things. We have a tool that undertakes real-time fraud detection. It will become better with time as it gets more and more data to be fed to the fraud indicators and to the model.

How are you leveraging AI and blockchain ?

We haven’t done anything significant on this front. Fraud monitoring is one area where we would like to use these technologies, but it is too early and we are in the experimentation stage. But that’s a focus area and we will invest.

We are a Section 8 company. The RBI envisaged this company for the good of the public and there is merit in that. Banks have been kind enough to fund us, and currently we are self-sufficient. But if required, we can look at the option of adding more shareholders in due course without changing the status of the company.