There is no need for Indian fintechs to operate in a grey area as new public infrastructure projects such as Open Credit Enablement Network (OCEN) and Unified Payments Interface (UPI) are providing huge opportunities for founders, National Payments Corporation of India (NPCI) CEO, Dilip Asbe said at an industry event in Bengaluru.

“When fintechs are small operate in a grey area and no one comes and asks you to stop… . But once you are significant then you will be stopped. There has to be a governance layer if you’re in financial services right from the start. And technically we have all the platforms whether UPI or OCEN to innovate on. And there’s no need for fintechs to operate in grey areas,” he said.

Over the last year, the Reserve Bank of India (RBI) has introduced several changes to bring new age financial companies across segments of digital credit and payments under the regulatory fold.

Asbe, who was speaking at an event organised by Pine Labs, a payments tech major, said from a brand recall and offers perspective, NPCI-operated card payments network, RuPay is the second biggest brand in the country.

RuPay currently competes with the likes of global payment giants Visa and Mastercard.

The NPCI chief, who was in conversation with Pine Labs chief executive Amrish Rau, said currently there is still room for digital payments to scale in the country.

“We still have a 10x scale to achieve. But the question for us is whether we can do it in the next 18 months. NPCI is still very slow … We are number two brand in cards now,” Asbe said during Pine Labs’ X.O conference. When asked about monetisation of UPI, he said, “the objective for UPI was to let it be a common denominator to accept payments. Even a small charge creates a friction. However the good news is that there’s a scale and that fintech ecosystem should see UPI as an infrastructure play.”

The NPCI chief also added that it was time for value-services on UPI to start generating revenues. “You have the base now but the question is how will you leverage the layer to build revenues from this service.”

One of the main contentions of Indian fintechs over the past few years has been the zero merchant discount rate (MDR) regime for unified payments interface (UPI) and RuPay debit card transactions, which was announced by finance minister Nirmala Sitharaman starting December 2019 to grow the acceptance of digital payments.

Asbe’s statement comes at a time when total transactions on UPI have touched the 8 billion mark in January and 7.5 billion in February this year.

Over the past month, NPCI has also been pushing UPI Lite, focused on small ticket transactions; and RuPay credit card on UPI, to link credit cards with UPI payment rails.

He said daily spends on RuPay Credit Card on UPI have crossed Rs 2 crore in daily spends, adding that, “We want to cross Rs 100 crore in a few weeks.”

Recently, the Monetary Authority of Singapore announced the integration of India’s UPI and equivalent network in Singapore, known as PayNow, will begin anytime soon, which in turn will reduce the remittance cost by 10%.

“Cross border is where the interest is. Over the next years India will be sufficient on cross-border payments and remittances,” Asbe added.

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