Daily transactions on the unified payments interface (UPI) platform can touch 1 billion in the next three years as UPI hits its full potential, said Dilip Asbe, managing director and chief executive officer of National Payments Corporation of India (NPCI), exuding confidence in India's payments system, which is considered as one of the best in the world.
“I don't think UPI has achieved its potential yet. For a country like India, we should do 10x of what we are doing,” Asbe said during a panel discussion at Moneycontrol's inaugural India Fintech Conclave (IFC).
“Realistically, if all of us continue the same efforts... I believe that in two to three years we will reach 1 billion transactions. By 2025, we should be able to achieve it,” he added.
Asbe's comments come at a time when daily UPI transactions have hit all-time highs. Earlier this week, Reserve Bank of India (RBI) Governor Shaktikanta Das told reporters at the launch of the Digital Payments Awareness Week that in the past 12 months, daily transactions crossed 36 crore, a 50 percent increase from February 2022 in terms of volume, while UPI transactions increased by 17 percent over February last year to Rs 6.27 lakh crore in terms of value.
In agreement with Asbe, Shinjini Kumar, co-founder of Salt App, praised UPI's exponential growth and said it is very unique compared to most payments systems across the world. “The magic of UPI in remote scenarios is extremely useful,” she said.
While speaking with Moneycontrol's Chandra R Srikanth at IFC, Kumar, Asbe, and Harshil Mathur, co-founder and CEO of Razorpay, emphasised the importance of constant innovation in the payments space.
“Next phase of growth will be to identify what are some specific traditional methods of payment and innovating it. Finding the total addressable market that is yet to see innovation in payments and bridging the gap," said Mathur.
“We startups constantly take motivation to innovate looking at what NPCI does on a regular basis," he added.
Asbe also talked about the need and importance of keeping UPI payments free. At present, UPI does not attract any merchant discount rate (MDR) or the amount that a merchant pays for using a lender’s credit card or debit card services for accepting their customers’ bills. For years, payment fintech companies like PhonePe have pushed for charging on UPI transactions, which will help them monetize their offerings.
“Payment system cannot be a large profiteering tool,” said Asbe
"If you have to achieve 10X growth, huge investment is needed from the industry... Government incentives have helped us survive the zero-MDR in some way, but the government may change this," he added.