Fintech far from saturated, 50X growth possible: NPCI CEO Dilip Asbe

Vast opportunities are opening up for the National Payments Corporation of India with India's digital public infrastructure going global, also allowing for fintech startups to tap more lucrative global markets, said Dilip Asbe, CEO of NPCI.

In a fireside chat with Shradha Sharma, Founder and CEO of YourStory, Asbe said while over the last few years the Indian fintech space might have grown by about 50 times, there is potential for another 50X growth.

“The way IndiaStack is going global, fintechs should aspire to go global too,” Asbe said. “They are already building in India, and now they can build on similar platforms outside as well.”

The government has a major role to play in pushing the adoption of an open architecture like IndiaStack in other geographies. India’s neighbourhood countries are having conversations around the adoption of IndiaStack.

In fact, countries like Thailand are now having similar discussions. With India having the G20 presidency, it is a great opportunity for the country to showcase its tech prowess.

Asbe pointed out three major areas where NPCI would want to innovate in the coming years.

1. Using UPI for secondary use cases beyond simple payments: NPCI is exploring the usage of UPI for commerce. The Reserve Bank of India has allowed one block of multiple debits as a feature on UPI in December last year. Asbe said that NPCI is exploring how to enable this for ecommerce transactions, where consumers can create a limit for a particular platform and keep doing multiple debits after the delivery of goods.
2. UPI Lite: Almost 500,000 transactions are happening on UPI Lite, and for the first time, there is a digital payment mode faster than a cash settlement. There is sub-2 second response time, Asbe said. At present, only BHIM and Paytm are live on UPI Lite, and a few other apps will join the platform soon.
3. Recurring payments: This is one space where NPCI wants to bring in a lot of innovation, so there is the ease of use. Recurring payments has the potential to change the way Indians transact. NPCI intends to make the flow simple, like scan and pay.

Highlighting Bharat Bill Payments—NPCI's flagship bill payment platform—Asbe said he would like to see more fintechs build on top of BBPS. With many startups building payment services within the app by integrating deeply with NPCI, he is hopeful that more startups will adopt BBPS for their services.

For instance, BBPS mandates are used for loan repayments. There is wide-scale adoption of this service, and many fintechs are integrating with BBPS to process their collection systems.

While talking about the opportunities, Asbe also had a word of caution for the founders in the audience. He pointed out that once consumers break the digital divide and adopt technology wholeheartedly, the switching cost for the consumer goes down. Hence, startups need to keep innovating and improving their products to remain competitive and ensure customer loyalty.

He took the example of NPCI to point out that, given the consumer is king, if they are not able to provide the best service to the consumers, then there is a high chance they would move on.

“These high volumes will not stay in UPI unless we keep innovating and creating new features… else consumers will go somewhere else,” he said.