With the Unified Payments Interface (UPI) and the Bharat Bill Pay System (BBPS) going live last month, the transaction landscape is expected to change dramatically. AP Hota, chief executive of the National Payments Corporation of India, tells Amrutha Penumudi the NPCI is working to make the UPI and BBPS complement each other. Hota is also hoping to take UPI to the local grocer and the railway ticketing system. Excerpts:
What has been the response to UPI?
It has been 15 days since the UPI went live. As per the latest data, some 2.25 lakh users have downloaded the interface and the number of transactions is around 4,000-5,000 a day. We hope to increase this to a million transactions per day by March. A new feature that we plan to introduce is bill payments. Now that the BBPS is active and the bill payments infrastructure is in place, that can also be plugged into the UPI. The two services will complement each other.
Building usage takes time. We want to launch an advertising campaign, but that will happen only after SBI and HDFC Bank join the UPI platform. Let a good number of customers be part of the interface, that’s when the advertising will have some meaning.
Which other merchants are expected to join the platform?
Indian Railways should soon come in as a merchant on the UPI interface. Like others, they too will have to come through a partner bank. There is no timeline on that, discussions have started and it will take more than three-four months. We also want to introduce the UPI to local grocery stores and this will need some additional work. A grocery storekeeper doesn’t have the time to look at his mobile. He will be happy accepting cash or cards. So unless the mobile experience is better than cards, it won’t work. We are encouraging manufacturers to come with proposals for devices, which allow for a quick UPI transaction so that the vendor is able to move on to the next customer. It has to be made as convenient as that.
Our team is targeting about 50 merchants by March next year.
When will wallets be allowed to join the UPI space directly?
As of now, the regulator wants the UPI system to be stabilised with the participation of banks. Banks have high regulatory checks, and we felt allowing pre-paid payment instruments such as wallets may make competition too aggressive. Moreover, there could be chances of a security compromise.
What is the NPCI doing to encourage adoption of electronic payments, especially in rural India? What are the challenges?
For UPI and electronic payments on mobile to take place, the customer’s mobile number needs to be linked to bank account. That’s the biggest challenge as the number of customers who have done this is small. The active customer base is less than 100 million. We are planning to come up with advertisements that encourage users to register their mobile numbers at either banks or ATMs. Of 2.20 lakh ATMs, at least 1 lakh allow users to register their mobile phones now.
What kind of cyber security measures are in place?
We are in a comfortable position. Our technical systems are highly secure and we are compliant with international standards. We subject ourselves to a host of audits, including a process where ethical hackers try to hack into our system once in every three months. We also provide banks with real-time alerts and supply them with a “fraud score”. We let them know if a customer is new to us, or if suspicious number of transactions are being made.