Does NPCI CEO Dilip Asbe favour UPI over RuPay, asks Pine Labs’ Amrish Rau. Here’s his answer

Dilip Asbe, MD & CEO of National Payments Corporation of India (NPCI).

National Payments Corporation of India (NPCI) MD and CEO Dilip Asbe has been favouring one of the organisation’s products over another and that is a complaint many have, according to Amrish Rau, CEO of merchants payment platform Pine Labs.

Rau and Asbe were speaking at the 16th India Digital Summit organised by the Internet and Mobile Association of India (IAMAI), the apex body of digital businesses. At the event, Rau asked Asbe if he prefers the Unified Payments Interface (UPI) over the card product RuPay.

On a personal level, Asbe accepted that he feels that the card payments ecosystem needs to upgrade and evolve soon.

He added, "The technology which the card world uses needs to upgrade. The industry should make more changes and should move faster on the innovation front."

The Indian card market has three large players – US players Visa and Mastercard, and NPCI’s RuPay. While RuPay has a large share in the debit card market led by disbursals under the Pradhan Mantri Jan Dhan Yojana (PMJDY), Visa and Mastercard enjoy a majority pie of credit cards.

“It has taken longer than required for cards to provide a similar experience like apps. A lot of changes are possible in the way QR codes are designed for cards versus for UPI,” he added.

But as an organisation, Asbe said NPCI believes in giving the consumer the choice to use UPI or card and providing both services and let the best product win.

“Plus before some competitor cannibalises you, it is better we do that ourselves (among products),” he said.

With the Reserve Bank of India (RBI) increasing its focus on regulating the fintech space, Asbe believes that increased compliance will make founders appreciate bankers more. The RBI has formed a separate department for fintech in the past week and is also working on guidelines and licensing for digital lenders.

“With compliance coming in, I hope that fintechs will do a little less of bank bashing. The cost of compliance and making changes is fairly high for banks due to regulations and policies. I think fintechs will slowly start appreciating the life of a banker,” according to Asbe.

He added that while innovation is necessary for the growth of financial services in India, it has to be done responsibly keeping in mind risks and customer protection.

Rau also prodded Asbe to tell the forum what he thinks NPCI’s valuation would be. At transactions worth over Rs 8 lakh crore a month, UPI now makes up over 50 percent of retail payments in India. However, Asbe refrained from giving a valuation number.

“NPCI is a public good, we don’t have any profiteering and valuation dreams. Our dreams are whether we can get 900 million people to transact digitally. We will deliver our mandate when we achieve a billion transactions per day, nothing less than that will satisfy us,” he said.

Asbe also asked Rau his views on IPOs for business-to-business (B2B) companies, with a Bloomberg report suggesting that Pine Labs has already filed for a $500 million IPO confidentially in the US with the Securities and Exchange Commission (SEC). The report added that the company is planning to list in the first half of 2022.

Rau responded, “I am not confirming anything on the IPO story. But markets are telling us that people are not interested in very high-growth companies with high burn. People are looking for a fair balance between growth and right financials in the bottomline.”

Besides leading Pine Labs, Rau is also an angel investor and has invested in startups like KhataBook, Cred, Jupiter, Open neobank, MPL, OnJuno, Dunzo, among others. He said that fintech is an area that he will continue to invest in.