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

by · March 22, 2023

Enormous opportunities open up for the National Payments Corporation of India with India’s digital public infrastructure going global, which also enables fintech startups to tap into more lucrative global markets, said Dilip Asbe, CEO of NPCI.

In a fireside chat with Shradha Sharma, Founder and CEO of Your storysaid Asbe, while the Indian fintech space may have grown roughly 50x over the past few years, there is potential for another 50X growth.

“As IndiaStack goes global, fintechs should also strive to go global,” Asbe said. “They are already building in India, and now they can build on similar platforms outside as well.”

The government has an important role to play in pushing for the adoption of an open architecture like IndiaStack in other geographies. India’s neighborhood is having conversations around the adoption of IndiaStack.

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

Asbe pointed to three main areas where NPCI wants to innovate in the coming years.

  1. Use of UPI for secondary use cases beyond simple payments: NPCI is exploring the use 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 NPCI is investigating how to enable this for e-commerce transactions, where consumers can create a limit for a particular platform and continue to make multiple debits after delivery of goods.
  2. UPI Lite: Almost 500,000 transactions happen on UPI Lite and for the first time there is a digital mode of payment faster than a cash settlement. There is a response time of less than 2 seconds, said Asbe. Currently only BHIM and Paytm are live on UPI Lite and a few other apps will join the platform soon.
  3. Recurring payments: This is a space where NPCI wants to bring in a lot of innovation, so it’s the ease of use. Recurring payments have the potential to change the way Indians shop. NPCI intends to make the flow easy, like scan and pay.

Highlighting Bharat Bill Payments – NPCI’s flagship bill payment platform – Asbe said he wants to see more fintechs build on top of BBPS. With many startups building in-app payment services by integrating deeply with NPCI, he hopes more startups will adopt BBPS for their services.

For example, BBPS mandates are used to repay loans. There is wide use of this service and many fintechs integrate with BBPS to process their collection systems.

While talking about the possibilities, Asbe also had a warning for the entrepreneurs in the audience. He pointed out that when consumers break the digital divide and adopt technology wholeheartedly, the switching cost for the consumer goes down. Therefore, startups must continue to innovate and improve their products to remain competitive and ensure customer loyalty.

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

“These high volumes will not remain in UPI unless we continue to innovate and create new features… otherwise consumers will go elsewhere,” he said.