French fintech firm Worldline is awaiting cross-border payments license from the Reserve Bank of India even as it is stepping up its presence in point-of-sales transactions with more use-case services, Ramesh Narasimhan, CEO of Worldline India told businessline.
While there is robust demand for all payment modes, “what we continue to see is requirements from merchants coming through a more use-case driven approach rather than a plain vanilla payment method,” he said.
The payments firm has set up POS terminals at villages in Tamil Nadu for payment of taxes and also for devotees making payments to temples.
The payments space is booming in India and more players are lining up to get licensed as a payments aggregator despite heightened regulatory oversight by the Reserve Bank of India on fintechs, NBFCs and financial services companies as it seeks to protect customers and depositors.
Narasimhan feels that the regulatory crackdown is justified considering the number of players. “If anything else, I think it makes for a healthier industry, considering the number of players we have. The rules are common to everybody, you don’t discover something new.”
Excerpts from the interview:
You have applied for a cross-border payments license. When do you expect to get it and how will that work for you considering Worldline already has a global presence?
Yes, we have applied for the cross-border license this year and hope to get it soon. There are two use-cases in cross border payments. One is that an external buyer wants to buy Indian goods and services. And the second is when an Indian buyer wants to buy goods and services from other parts of the world. The easiest markets are where the Indian diaspora is present such as Middle East, Asia, Southeast Asia, Africa, even Europe and US, because they will want Indian services, digital goods and services. But apart from this there are also Western citizens who want to buy our goods and services. So, there’s a demand for goods on both sides. And what we do is to say, you take care of your service, we will carry the whole transaction for you and pay you back in the currency of your choice, as long as it’s dollar, euro or something else.
How are you seeing the growth in business in India, offline and online?
On both sides of our business, which is the POS, or in-store and on the online payment gateway, we’ve seen phenomenal growth, almost more than a double digit growth for us in both our businesses. We service some of the biggest e-commerce merchants in the country and sectors such as education, hospitality, industry and government. On the POS side, we primarily have been working through banks. Now we’ve started our own direct acquiring. We work with about 25 to 30-odd banks deploying POS machines on their behalf. What we continue to see is requirements from merchants coming through more use case driven approach rather than a plain vanilla payment method approach. So what we’ve done is along with the National Informatics Sector, and Indian Bank in Tamil Nadu, we’ve deployed POS terminals at every village for collection of local taxes. NIC has developed the software, and we enable the payment link. It’s a specific use case. We’ve also done enables POS at temples in Tamil Nadu. Instead of putting money in the hundi, you just swipe or pay through your phone. So we see the growth of payments or digital payments will happen through use cases. Similarly, on the online side, we can develop a use case for a specific industry, like hospitality industry or a specific industry. There’s so many taxes the government collects. You can automate them, or you can digitalize them. So we see a rapid growth in innovative use cases that will take us to the next level in terms of usage.
RBI has been cracking down on fintechs and payments companies. How do you see that ?
Well, as a payments provider we deal with public money, so we have to handle it with care. Therefore you need regulations around it. The important thing is these guidelines are published and there is nothing hidden about them. Now, when you know that there are the rules, these are the regulations, then I think it is important that you follow them, because they are there for a reason, whether it be to prevent money laundering or frauds. When the RBI does an audit and they find your IT infrastructure, KYC process is not up to the mark, or that you are charging too high rates of interest I think the regulator has cracked down very correctly, and if anything else, I think it makes a healthier industry, considering the number of players we have. The rules are common to everybody, you don’t discover something new. RBI’s, NPCI’s guidelines are all over the place.