Role of regulation is very important in digital lending, says Amazon Pay India Whole-time Director

Amazon Pay India Whole-time Director Vikas Bansal

With the growth in credit, the role of regulation is going to be increasingly important to protect customers as well as to ensure certain minimum standards, said Vikas Bansal, Whole-time Director of Amazon Pay India, in an exclusive interview with Moneycontrol.

"Credit has to be done in a very transparent fashion, and it should protect customers. Here, the role of regulation is very important, so that it sets the minimum standards in terms of how this is to be done," said Bansal.

Bansal said that the BNPL (buy now, pay later) business will continue to expand and become much more than what it is today.

Edited excerpts from the interview follow:

How do you see the role of regulation with respect to digital lending?

Credit has to be done in a very transparent fashion, and it should protect customers. Here, the role of regulation is very important, so that it sets the minimum standards, in terms of how this is to be done. Regulatory enablement can help strengthen digital credit.

How does Amazon Pay plan to leverage the growing popularity of UPI, and increase its adoption in tier 2 and 3 cities?

UPI has been a phenomenal success throughout the country. Amazon Pay UPI continues to make progress and provide that experience across Bharat.

To give you a data point, today more than 75 percent of our customers who use UPI come from tier two and three cities. This shows that UPI is growing where it really matters. We have more than eight crore customers using  UPI.

What is your opinion about the future of the BNPL business? Do you think regulatory interventions would affect its growth?

BNPL will continue to rise and be much more than what it is today.  There's a younger population that’s looking for credit, looking for digital credit, something that can be availed of instantly.

BNPL is getting to scale to profitably serve this segment,  which is why you're seeing the growth because all these things are coming together.

When you talk about regulatory interventions, RBI's objective is very clear — it wants to promote transparent and fair practices. It wants to educate and protect customers.

I think the industry will adjust to the new standards that RBI has laid out. And after they adjust, the industry will continue to grow.

Is Amazon Pay getting a tough fight from competitors like PhonePe and Google Pay. How are you tackling it?

Our philosophy has always been about the customer. We look at customer problems, and we see how we can solve them so we can serve them properly.

There are a lot of problems that exist in the country, right from payment failures, and the steps it takes to complete a payment, to credit and insurance penetration. We've hardly scratched the surface. I think our focus is on addressing these first.

Are you planning to onboard former bankers on the Amazon Pay India board?

It's a question of the business need, right? And the skill set needed. There are many people in our India team with banking and fintech expertise.

Though we are always talking to former bankers to add more expertise, I cannot say anything more at the moment.