At a time when the initial public offer (IPO) market is booming in India on the back of strong retail investor demand, up to 70 percent of IPO applications are coming through the unified payments interface (UPI), said Dilip Asbe, Managing Director and CEO of National Payments Corporation of India (NPCI). The organisation runs the country's most popular mobile-based digital payments platform UPI.
There are over 12 crore demat accounts in the country. While there are only an estimated 5-6 crore unique credit card users in the country, there are more than 350 million UPI users. Most of the retail participants coming through digital investment platforms such as Zerodha, Groww, Angel One and Groww have been taking the UPI route for IPO applications.
Speaking at the Global Tech Summit organised by Carnegie, an international relations think tank, Asbe also said that India is in talks with over 50 countries to help them build domestic digital payment systems like UPI.
"I believe the definition of digital public infrastructure (DPI) is going to vary from country to country. A decision has to be taken by them that we need democratisation of payments. And DPI has to be well regulated with an ecosystem approach," he said.
UPI is already the world's largest instant mobile payments platform registering over 11 billion transactions every month and a transaction value exceeding Rs 17 lakh crore.
While a lot of developed countries have well-developed credit card systems for digital payments, most developing countries do not have an instant mobile payments and settlement platform and India is working with some of these countries to build such platforms.
"We also started an international subsidiary (NIPL)and are talking to regulators worldwide. We are allowing access to UPI source code... Countries will have their solution providers work on this. The adoption by various countries will also open up government-to-government and regulator-to-regulator dialogues," he added.
The government is trying to help developing countries build similar domestic instant mobile and card payment systems for goodwill. This will in turn help the Indian government make these systems interoperable with India’s systems such as UPI for international payments and transfers, and could displace the Society for Worldwide Interbank Financial Telecommunications (SWIFT), which handles international bank transfers as of now, in the long run.
NPCI’s most successful product platform remains UPI, which is expected to surpass Mastercard's daily transaction volume of 440 million. UPI does around 340 million transactions a day. Visa, the world's largest card network, processes an average of 750 million transactions per day.
These companies operate in over 200 countries, many of which are much wealthier than India, and they have been around for over 60 years. On the other hand, UPI has achieved this scale in less than eight years.
NPCI also has Rupay card technology platform, which is also working alongside existing Visa and Mastercard as an alternative ecosystem. For instance, NPCI International announced a strategic partnership with Al Etihad Payments (AEP) to advance the development of the UAE’s first national Domestic Card Scheme.
The recent blockade of Russian payment systems from using American networks such as Visa and Mastercard has made every country realise that a parallel domestic payment system is vital for survival.
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