Demonetisation spurred the growth of digital payment companies such as Paytm, MobiKwik, FreeCharge with PPI payments in November 2016 garnering Rs 13 billion in value across 59 million transactions, according to RBI data, but the industry continues to tackle challenges such as interoperability, standard, and innovation. At FinTechX conference by Internet and Mobile Association of India on Thursday, industry experts discussed the changing role of the regulator from supervisor to partner in learning. “Role of the regulator should move from supervising to facilitator and enabler. With the growing pace of innovation, companies must adopt learning in approach and regulator should partner in the learning process,” said Smita Aggarwal, director of investments at Omidyar Network. The parity between digital and cash is important, according to Naveen Surya, MD of ItzCash and Chairman of Payments Council of India. “Intent of the regulator should remain the same i.e, to digitise and encourage cashless transactions. Disparity between digital and cash will slow the growth of digital transactions in India,” he said.
Vivek Srivastav, SVP of research and innovation at ReBit reiterated the sentiment and said digital transactions should be incentivised and cash transaction should be disincentivised. Mobile wallets have been pouring money to drive traction but heavy promotional cost for the company restricts profitability of the business. Srivastav added that fintech companies have not fully utilised the scope of financial services such as insurance, lending, mutual funds, pension funds. “Regulations should be proportionate. Standardised regulation in terms of networth cannot serve all companies same. Regulator must look at what the company wants to do,” according to Vikram Singh, partner at BTG legal. He added that regulator should look at innovations worldwide and introduce them in India in a phased manner.
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Saurabh Garg, joint secretary at the department of economic affairs, ministry of finance pointed that fintech companies should function as a tool for financial inclusion in the country by tapping onto opportunities such as P2P (peer-to-peer) lending and make digital transactions a part of credit score.