The National Payments Corporation of India (NPCI) is estimating a run rate of 25 million new mandates for customers getting registered every month for recurring payments by the end of this fiscal. The federal fintech firm is also looking at a target of processing one billion UPI transactions per day over the next three years.
Speaking at The Global FinTech Fest 2021, Dilip Asbe, Managing Director and CEO, NPCI said, “Last year we had about 22 billion UPI transaction volumes and this year we are expecting that to touch 40-42 billion. And annually the value is over one trillion dollars. There is still a possibility of 10X growth in digital payments. We should process about 50 billion transactions on a monthly basis and one billion per day over the next three years. There is a lot to be done, we have just started.”
“While I would assess that we would touch the one billion mark by the next five years, given that the government and regulators are keen on growing digital payments ecosystem at scale, we should aspire to reach one billion transactions a day in three years,” Asbe added.
Rajan Anandan, Managing Director, Sequoia India & Surge, who was conducting the chat with Asbe added, “We should make a national mission to get UPI to a hundred countries. That would make world a better place and that will create a massive number of global Indian payments companies.”
Recurring Payments
One of the initiatives NPCI is actively working on is to make recurring payments safe and secure by adding two-factor authentication and creating the right mandate for the customers.
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“We call it a layer of ‘auto pay’ wherein NPCI’s three-four existing companies are fighting for a share in that space. We have an auto pay layer on UPI, Rupay, NACH and Bharat Bill Payment System. These systems will compete with each other to get the mandate share in the market. We have been receiving 2 million new mandates registrations from customers for auto pay on UPI every month. NACH is also getting around 2 million. Rupay and BBPS are just starting in a month or so,” Asbe said.
“We want to exit the financial year with a run rate of 25 million new mandate registrations per month. I strongly believe the regulator believes in long-term gains,” he added.
Need for MDR
According to Asbe, there needs to be reasonable charges for MDR. As the volumes are growing, as an ecosystem they must set up a path.
He said, “We need to make it more cost effective for the ecosystem. While the government has been trying to make digital payments accessible to smaller local merchants by making MDR zero during the demonetisation phase in good faith, we are constantly having conversations with all the ministries involved, asking to set a reasonable charge and thankfully the finance minister announced some incentives in the budget.”
“The 10x growth will come through investments in customer onboarding, spreading awareness and customer protection. The merchant base needs to grow from 50 million active merchants to 100 million. Everybody in that supply chain needs to make money, at least to fund their IT investments and banks have to create scalable CBS (core banking solutions) processes to allow huge volumes of UPI transactions. We are hoping the government will very soon make an announcement on this,” he added.