How Is Regulation Redefining The Payments Landscape?

Worldline Rise 2021 India chapter is a global initiative powered by Worldline. The recently concluded event conducted on 8th October 2021 was based on the theme ‘Driving Growth Through Innovation In Payments’ where industry leaders from across the spectrum of the payment value chain came together to discuss key developments in the ecosystem. Payment is one of the fastest-growing industries that thrive on innovation. We explore diverse aspects of this theme through insightful sessions and panel discussions.

The government and regulators have prioritised digitisation as a foremost strategy for the payments domain in India. The final panel discussion of the event revolves around the topic - How Is Regulation Redefining The Payments Landscape? This insightful discussion was moderated by Ashish Belapurkar (Senior Director - Worldline).

Here are the distinguished panellists:

  • Shailesh Paul (Vice President and Head - Merchant Sales & Acquiring and CyberSource, India and South East Asia at Visa)
  • Mahendra Dohare (General Manager - Merchant Acquiring, Credit Card Issuance, Punjab National Bank
  • Ramakrishnan Ramamurthy (Executive Vice President - Service Delivery, Worldline)

How are the current updates taking shape in India?

India has leapfrogged on the innovation scale in the past few years. Sandbox testing, UIDAI’s (unique identification authority of India) role in providing a verifiable unique identity, relaxed KYC, video KYC for NBFCs, and Jan Dhan-Aadhaar-Mobile (JAM) Trinity are measures undertaken by the Reserve Bank of India (RBI). Setting up and co-funding the payment infrastructure development fund (PIDF), the increasing use of unified payments interface (UPI), and opting for a Central Bank Digital Currency (CBDC) are big steps forward.

Bridging the gap between the undertaken measures and the customers

India’s financial inclusion program is driven to make it optimum for everyone to come on board and enable all customers to be a part of a digitised framework. The primary challenge is to include tier 2 and 3 cities into the digital ecosystem. The PIDF focuses on introducing QR codes and providing a proper banking correspondence system. Through these digital channels, a lot of microinsurance and micro mutual funds schemes are launched by different players in the market.

Refinements in the system

The primary three aspects that need to be tackled are:

  • Cost - Today’s infrastructure requires a cost to be deployed. In recent times, an NFC (near-field communication) enabled phone can become a cost by itself. It can present a QR code, accept a card through NFC, and send out a link for payment.
  • Access to technology - Connectivity is an important aspect. Access to the internet, electricity, technology and innovations that are in the shadow of internet coverage are imperative.
  • Education - Buyers and sellers need to understand the use of such technology to facilitate rapid adoption of both the current and future infrastructure.

The role of New Umbrella Entities (NUE)

NUE is a way forward to create competitiveness between players and bring in a set of payment options. The development in the ecosystem with respect to financial technologies is taking place on its own. Big players in the ecosystem will have the capacity, technology, investment, capital, and collaboration with other players to invest in the new technologies. This framework under the NUE framework will be a landmark milestone for a country.