UPI payments will drive digital India’s growth, writes Will Cathcart of WhatsApp

August 01, 2020 7:00 AM

UPI is a world-class payments system that can also anchor a broader suite of fintech applications like micro-pensions, digital insurance products, and flexible loans, which WhatsApp can facilitate

Launch of UPI Credit: NPCI.orgLaunch of UPI (Image Credit: NPCI.org)

By Will Cathcart

In a recent address to leaders of the US-India Business Council, prime minister Narendra Modi highlighted the growth and gaps in India’s digital economy. Nearly 500 million Indians today are active internet users, he said, but another 500 million have yet to come online. Doubling the size of Digital India requires bridging this divide and expanding access to the tools and platforms that power India’s digital economy today.

Foremost among these platforms is the Unified Payments Interface (UPI) system. More than four years ago, prime minister Modi launched this ground-breaking initiative to provide Indian citizens with the ability to make digital payments to one another and to the more than 60 million Indian small businesses that serve local communities and the world.

The UPI system set a national open standard for all of India’s banks (155 and counting) that technology companies can adopt on an equal and level playing field. This approach means that no one company, foreign or domestic, can write the rules for the other. Everyone has to meet the same standards set in India.

This project has proven wildly successful in just four years. Since its launch, the UPI system has grown to manage a 100 million-strong user base, and it is just scratching the surface. Meanwhile, it has set important new frameworks around security and efficiency. Because of the strong rules that India has put in place, payments transaction information remains with the banks and within India. And as a platform built on Indian technology and governed by Indian rules, UPI benefits Indians now and holds great potential for further innovation and commerce.

Rapidly scaling UPI is the need of the hour and one of the best ways to strengthen India’s digital economy. Today people can send money to their ageing parents isolated during this time of physical distancing. Migrant workers can support their families. Farmers can make sales outside of the market.

With UPI, technology companies can partner with local technology leaders, and Indian financial institutions, to serve the unique needs of India’s diverse users—especially those living in rural areas or transitioning to the internet for the first time. In fact, NPCI has also set a goal to grow UPI to 500 million users by 2022, which if achieved, would be a true gamechanger for Digital India. We are eager to contribute to this effort by launching payments on WhatsApp across India and help power a new wave of fintech innovation and financial inclusion.

The UPI infrastructure was built for scale and reaching hundreds of millions of people without the risk of any one company grabbing an unfair share. Given the limited number of people who are able to send money to friends and loved ones even today, it is imperative more tech companies are able to leverage the power of UPI to expand the digital ecosystem to accelerate financial inclusion.

Indeed, UPI is a world-class payments system, that can also anchor a broader suite of fintech applications like micro-pensions, digital insurance products, and flexible loans which WhatsApp can facilitate. These are custom solutions created by Indian technology companies on this public infrastructure of UPI that will first solve large social, business and financial problems in India and then become templates for other countries to deploy. These powerful tools can build on the extraordinary success India has made in lifting millions of people out of poverty and build resilience to future economic shocks. Covid-19 has only underscored the importance of these tools, which will serve as critical lifelines for small and micro-enterprises and individuals as they look to recover from the pandemic.

Even amid global uncertainty, I am profoundly optimistic about India’s future growth, and we share prime minister Modi’s belief that “there has never been a better time to invest in India.” While the world grapples with Covid-19, India continues to stride forward. We see a nation that is determined to meet its moment and the unique needs of all of its citizens. With courage, ambition, and boundless potential, India can emerge from this pandemic stronger than ever before—a leading democratic digital powerhouse that will lead the world through the 21st century.

The author is Head of WhatsApp

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