Demonetisation has given an immediate boost to the payments industry, primarily on debit cards, and the share of low-value payments has increased, pointing to use of cards in purchase of essential goods, says Porush Singh, country corporate officer, India, and division president, South Asia, MasterCard. In an interview with Mithun Dasgupta, Singh says India is a key market for MasterCard, and it currently has the highest number of employees outside the US. Excerpts:
With the government promoting non-cash payment system as part of its wider plan for cracking down on tax avoidance and better monitoring, how far can India move towards cashless and digital transactions? What are the major challenges ahead for this structural transformation?
Demonetisation is a great move which will have a positive impact on the economy in the long run. It fundamentally addresses the underlying ‘cash engine’ that drives the shadow economy. In the short run, there are challenges as in India 95% of transactions are done in cash. It is also important to note debit cards are predominantly used only to withdraw cash.
India also has low last-mile connectivity with a mere 14 lakh PoS terminals. The industry is working together with the government and the RBI to develop acceptance infrastructure in the country. We are heartened by the government’s directive to add a million PoS terminals in the next three months.
How would MasterCard seize the opportunity to boost its business in India when the country is making the transition to a less-cash society?
MasterCard will continue to power digital India and cashless India by investing in technology innovations as well as improving both security and authentication for payments in India.
Over the years we have invested in building a digital payments ecosystem in the country and are working with the industry to educate consumers and merchants on the benefits of going digital. Till date, more than 50,000 traders have been trained and brought under the ambit of financial inclusion.
MasterCard has developed a QR code-based payment solution that is the world’s first interoperable solution allowing merchants to accept cards of all major domestic networks with just a smartphone without a PoS terminal.
How much surge in transactions and cardholders’ growth do you see for the company in the next one year?
The demonetisation move has given an immediate boost to the payments industry, primarily on debit cards. Share of low-value payments has increased, pointing to use of cards at everyday-spend categories.
The current situation has helped various stakeholders understand the importance of electronic payments.
The challenges posed in the immediate term are forcing the regulator and the government to think of strategies to improve penetration. Stakeholders would need to ensure that future developments point to a healthy growth of the industry with customer interest in mind.
How much has the company invested in recent times in India and what is your investment plan going ahead?
India is a key market for MasterCard, and over the years we have made substantial investment with respect to people, infrastructure and technology. Our investment of over $250 million over the last few years went into setting up of two development centres in Pune and Baroda. At present, MasterCard has the highest number of employees in India outside the US.
Are you in talks with more banks to integrate recently-launched mobile payments solution, Masterpass QR, with their mobile platforms?
Masterpass QR is a low-cost and easy-to-deploy innovative payments solution that is designed to ensure that even the smallest of merchant can reap the benefits of a digital payments solutions. We have already launched this solution in partnership with a bank and all the key banks are implementing this solution. We will continue to look for opportunities to expand this service.