World’s most innovative Regulator

Payments, NPCI and a new way to regulate

Indians love a good complaint, almost as much as they love a good cup of chai. We love complaining about everything, from the weather to the traffic to the crowded metro trains. We are no strangers to complaining about the slow pace of innovation, cumbersome regulation, and bureaucracy in the country. It feels like the only thing moving at the speed of light are our internet memes.

What if I tell you about one sector where our regulators are amongst the best in the world in introducing innovative products. You may have guessed it, it’s Payments. While India may have lagged in few sectors in the past, Payments has seen remarkable innovation. In fact, the Payment products and services introduced in India are often considered to be superior to those in many developed countries. Thanks to the Reserve Bank of India's (RBI) and NPCI, India is now at the forefront of digital payments. (National Payments Corporation of India (NPCI) is a non-profit organisation, an initiative of the RBI and Indian Banks’ Association).

First up is the undisputed king of Indian payments, Unified Payments Interface (UPI), which was launched by NPCI in 2016. UPI revolutionized the payments ecosystem in India by enabling users to transfer money instantly and securely just using their mobile phones. As a millennial, I often find myself reaching for my phone to make payments, whether it's to split the bill with friends or shopping online. Private players have also played their part by offering and promoting services which are seamless, and which scaled with time. These innovations have not only benefited consumers but also encouraged the adoption of digital payments by merchants, businesses, and even government organizations. It has managed to bring millions of Indians, even those in rural areas, into the digital payments fold.

So, what's next in store for the payments space in India? Well, brace yourself, because there's a lot to look forward to. UPI may have been the opening act, but these following products are the headliners! The following list will help you stay on top of all the latest products built on top of UPI. Your inner tech geek will be over the moon. These are at the same stage today where UPI was in 2016, waiting to explode. Keeps your eyes peeled, folks.

New Products

UPI International: The Indian government has been pushing for internationalisation of Indian rupees and payment products. NPCI’s arm NIPL is in-charge of spreading UPI to other countries. Indian travellers can make payments in Singapore, Bhutan, Maldives, Japan, Bahrain, UAE, Saudi Arabia, France, Oman, and the UK using UPI.

Rupay CC on UPI: Users can link their Rupay credit cards on UPI and make quick and easy payments.

UPI Lite: Making seamless small value payments (up to Rs. 200) without entering MPIN

PPI on UPI: Users can now link their mobile wallets to their UPI IDs. This makes your e-wallets interoperable.

One time block and multiple debits: Till now, UPI allowed customers to make recurring payments using UPI AutoPay. Now, users will be able to block funds in their bank account for specific purchases with the merchant that will be debited once the product or service is received. This is expected to shift users from Cash on Delivery to this new functionality.

Credit on UPI: Individuals with pre-approved credit lines from banks will be able to use it to make payments over UPI. Digital Rupee (e₹): A tokenised digital version of the Indian Rupee, to be issued by the Reserve Bank of India as a central bank digital currency (CBDC)

Bill Payment for NRIs: Non-Residential Indians will be able to make bill payment via BBPS (Bharat Bill Payment Service)

(UPI can now be linked to 7 different accounts – Savings account, Credit card, UPI Lite wallet, PPI wallet, overdraft account, line of credit and NRE account)

That list of payment products is longer than a binge-watch session on Netflix! UPI may have been the teaser, but the above are expected to be blockbuster hits!

Now, NPCI is making waves and getting recognized on the global stage. Recently, it featured in Time magazine's prestigious list of top influential companies worldwide. This accolade is a testament to NPCI's remarkable contributions in revolutionizing the payments landscape in India and beyond. A clear validation of its efforts to bring about positive change in the world of payments.

I was wondering what makes NPCI different than other bodies in India? The following are the major reasons for it:

NPCI is a collaborative organization:

It works closely with RBI, banks, financial institutions, and other stakeholders to develop and implement new payment solutions. It's like the F.R.I.E.N.D.S of the payment’s world, always ready to innovate, collaborate, and break the monotony of traditional banking. This gives NPCI the flexibility and agility of a private company, while also benefiting from the backing of the RBI. It is committed to financial inclusion: NPCI isn't just about payments; it's about giving an inclusive hug to the unbanked and underbanked sections of society.

NPCI is committed to making payments accessible to everyone, regardless of their income or location. This has led to the development of a number of low-cost payment solutions. NPCI is a technology-driven organization: It has a strong focus on using technology to improve the efficiency and effectiveness of payments systems. They're like a kid in an electronics store, grabbing all the shiny new products and figuring out how to integrate them into a lager landscape.

The NPCI has truly disrupted the traditional notion that only private players are capable of innovation. Who would have thought that our regulators could bring such game-changing solutions to the table? The growth of fintech in India owes a lot to their relentless efforts. It is a shining example of how regulators and private players can work together to bring about real change. With the constantly growing pipeline of products, NPCI is showing that they have the vision and the drive to keep pushing India forward as a fintech leader. Surely, our regulators can give anyone a run for their money (pun intended)!

It's an exciting time to be in the payments space in India, and we can all look forward to what the future holds with the RBI and NPCI leading the way. Who knows, maybe soon, regulators in other sectors will start to follow in their footsteps and bring world-class innovation to their respective industries.

Author: Shikhar Singal

End movie credits:

Fintech Mavericks: Kunal Shah, Chinmay Marulkar, Aman Jain, Arnim Dhakad, Ashish Purohit, Harsh Gupta, Keroli Somaiya, Parin Detroja, Sneh Baxi, Nakul Agrawal

Disclaimer: The opinions and views presented in this article are purely personal and don’t represent views and opinions of author’s employer or any other organisation