'There is a surge in card transactions'

National Payments Corporation of India (NPCI) is an umbrella organisation for all retail payments system in India. In an interview with Umesh M Avvannavar of DH, NPCI MD and CEO A P Hota explains how the organisation has designed products with an objective to turn India into a less-cash society.

Excerpts:
 
How far are we prepared to go cashless? What are the problems involved? How long will it take to cover at least 50% of the transactions through the digital medium?

With innovations in digital payments in the last few years, we are definitely on the right path. The recent step – demonetisation – has provided a big boost in the adoption of cashless transactions. But considering that nearly 90% of spending on personal consumption takes place through cash at present, we should consider our efforts to be a success if we hit 50:50 in three months.
 
What about the technology in ramping Point of Sales (PoS) machines and networks? How many PoS machines do we need and how much time will take to manufacture/deliver them?

There are 14 lakh PoS terminals in the country and the number is growing by 50,000 each month. However, for a country of our size, the network is very small. In Brazil, with a population of 205 million, there are around 4.5 million terminals. Therefore, there is an urgent need for ramping up the number. It took five years for us to add the last 1 million terminals. But now the government is planning to bring one million terminals in the next three months. The recent removal of excise duty on PoS manufacturing is a major step.

It was announced in the Budget that the government will undertake a massive nationwide roll-out of ATMs and micro ATMs in post offices in the next three years. India Post is playing a key role in setting up ATMs and micro-ATMs across rural India.  

What is the role of NPCI in realising the Digital India dream?

At NPCI, we have designed products with an objective to turn India into a less-cash society. Products like RuPay Debit card, IMPS, USSD *99#, UPI and a pilot launch of BBPS will help transform India into a less-cash society. We are also planning other products like Electronic Toll Collection, Tap and Go and RuPay Credit card in the months to come.
 
What impact has demonetisation had on the efforts to drive in a less-cash society?

Cards and mobile phones have emerged as the most widely available money transfer systems. After demonetisation, there has been a surge in the use of cards on the point of sales (PoS) devices and also in e-commerce. Earlier, about six to seven lakh PoS terminals were used on a daily basis, but now this number has shot up. In Tier 3 and Tier 4 centres also, where POS machines were not being used earlier, now they are being used more frequently.

In the mobile payments segment, we have seen the number of transactions go up in Immediate Payment Service, in Unified Payments Interface as well as in *99# – which is a Unstructured Supplementary Service Data based mobile banking service from NPCI that brings together diverse ecosystem partners such as banks and telecom service providers. A customer can access financial services by dialling *99# from the registered mobile number with the bank. The service works across all GSM service providers and handsets.
 
What is the change in volume of transactions in the last fortnight?

We noticed three times higher usage of RuPay cards on PoS and ecommerce, and two times increase in mobile payments. Unique card users, unique mobile payment users and unique merchants are also increasing.
 
How is Aadhaar Enabled Payment System (AEPS) easing the problem of last mile access to bank accounts and cash in rural areas?

The AEPS is an innovative bank-led model which allows online financial inclusion transactions at micro-ATMs through business correspondent of any bank using Aadhaar authentication.

The services offered under this platform are balance enquiry, cash withdrawal, cash deposit, Aadhaar-to-Aadhaar fund transfer etc. Banks have been successfully providing AEPS service to enable the benefits of Financial Inclusion and Direct Benefit Transfer.