UPI transaction.
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Bengaluru: Despite India actively pushing the envelope for adoption of its unified payments interface (UPI) internationally, cross-border payments remain challenged by concerns like money laundering and financial crimes, said financial technology (fintech) executives on Wednesday.
“The real barrier to cross-border payment is money laundering, terrorist financing, sanctions list and forex reserves. Cost, speed, and regulation are inefficient solutions to these problems. What you want is a zero-cost, high-speed UPI - but to enable that, someone has to solve these four things,” emphasised Amarjit Kumar, Head of Strategy and Operations at UK-based fintech Revolut.
“It is not just compliance with financial regulations. It is also about law, anti-money laundering. It is complicated, especially since it is not just your own country,” agreed Abhishek Arun, President, Platform Strategy and Communication, M2P Fintech.
Panelists pointed out the need to accept that cross-border payments may ultimately not be as seamless as UPI.
You want to ensure that the money that you touch is clean. That requires a certain amount of checks, documentation, and validation. In fact, those problems are there in domestic money transfer as well, pointed out Supriyo Bhattacharya, Chief General Manager, Finance and Banking, International Financial Services Authority (IFSCA).
Experts at the event - ‘Fintech Fusion India’ - urged interoperability between governments to achieve this, as well as leveraging blockchain technology.
Company officials also spoke of challenges present in the larger fintech ecosystem, whether it is the need for a decentralised fintech-specific regulator or data leak concerns.
Mayank Goyel, CEO, Moneyhop brought up solutions such as zero-trust environments and quantum-level cryptography to make sure that data in transit is not decipherable. “It is very difficult to establish where the data leakage will happen, especially in countries like India where there are data localisation rules,” he stated.
Comparing the global fintech industry with India, Aman Nurullah, Director, Global Credit Risk, PayPal, added that in India, there is too high a level of centralisation. He pointed to the need of a specifically-dedicated fintech governing authority.
Still, some pockets of easier growth do exist. “Gujarat International Finance Tec-City (GIFT) operates completely outside the jurisdiction of the Reserve Bank of India (RBI), enabling fintechs to build global products from within India,” Monica Jasuja, Chair, Advisory Committee, Fintech Fusion India and Chief Expansion and Innovation Officer, Emerging Payments Association Asia told DH on the sidelines.