UPI user base can nearly double in next 3 years: NPCI’s Asbe

A lot of emphasis has been put up on the safety and security of UPI, he said.

The Unified Payments Interface (UPI) is expected to grow by 300 million more users in the next three years from the current 350 million, said Dilip Asbe, the Chief Executive Officer of the National Payments Corporation of India (NPCI), which manages the nationwide fast payment system. Speaking to DH’s Arup Roychoudhury, he said that when it comes to fast payment system connectivity, India’s priority is Middle-East, immediate neighbours, and South East Asia. Edited excerpts.

What have been the key takeaways from the session on payment systems here in the G20 meeting?

The key takeaway is that this is a complex subject because the fast payment system of every country is unique. So for example, there is no payment system like UPI. It’s a diverse ecosystem of banks, fintech, startups, and payment service providers. Also, every regulator has a very different view on the risk in the payment systems. So while work has been done by the Bank for International Settlements and its Committee on Payments and Market Infrastructures on creating the standards, it is still a complex subject. But having said that, I believe that in the next 10 years most of the countries, the bigger trading and remittance partners will become real-time

India is very keen on this happening because this gives us a long-term advantage. The way we are self-sufficient on domestic payments, we would like to connect to partners and have direct bilateral linkages to create the highways for process payments, remittances, etc, over the next decade or so.

We are connecting UPI with Singapore, and UAE and are in talks with Indonesia. Which other countries’ fast payment systems are we looking to connect?

The Middle East is a priority. The RBI is having discussions with some of the nations there, and NIPL (NPCI International Private Ltd, its international subsidiary) is also involved. These kinds of projects cannot happen without regulatory collaboration. We are also in different stages of conversations with our immediate neighbours and in South East Asia. We have conversations going on with Bangladesh, Sri Lanka, Nepal and others. So the focus is on the high-traffic countries and the neighbouring countries are fairly high-traffic for us. In my assessment, I think the neighbouring countries would happen faster.

What is your vision over the medium term, especially since you have spoken about reaching a billion transactions a day by 2025?

Our vision is that we should reach a billion payments in the next 2-3 years. But we are not impatient about that. We believe that the increasing smartphone penetration and internet connectivity, especially in rural areas, will drive the requirement. I strongly believe that while there are 350 million users right now, another 300 million can join in the next three years’ time. That’s the prerequisite for a billion a day. We need more users, more merchants.

So would you say that network penetration or smartphone penetration is your biggest obstacle?

I think the biggest obstacle is the education and awareness, literacy and understanding of the payments system. And that’s where we have to be patient. It is a gradual process, a changing of attitudes and mindsets because cash is almost like a religion in India. But I think the country is changing, thanks to the RBI and the government’s focused attention on this, because this has huge benefits for the formalization of the economy.

How is NPCI keeping ahead of cyber criminals, who surely target our massive payment system?

It goes without saying that this is an area where we are most concerned. A lot of efforts have been made, but it’s a constant journey. We have to be better than the cyber-criminals. A lot of emphasis has been put up on the safety and security of UPI. NPCI has been recently registered as National Critical Infrastructure along with some other institutes in the country, and there is a lot of emphasis on cyber risk mitigations, monitoring the traffic which is coming from outside, and also a constant oversight of the NPCI board and the RBI in the monitoring the risks.