Will India’s booming Fintech sector be the key to her Amtanirbharta?
India is undoubtedly the forerunner in digital payments worldwide. According to the latter ACI worldwide reportIndia accounted for the largest number of real-time transactions in 2021 (48.6 billion) – almost three times as much as China (18 billion) and almost seven times as much as the US, Canada, UK, France and Germany combined (7.5 billion ).
Unified Payments Interface (UPI), which is among the largest real-time payment systems in the world, is expected to grow to almost 59 billion in volume by 2023. When the National Payments Council of India (NPCI) set out to create UPI, their vision was simple: they wanted to create an interface that facilitates peer-to-peer and person-to-merchant transactions between banks.
The UPI Success Story
Why is UPI so successful? Customers prefer UPI transactions over cash payments mainly due to the ease of payment, security of transaction and convenience. For payees, it eliminates problems involving dishonored checks, counterfeit bills, submitting exact bill of exchange, keeping large amounts of cash and needing to deposit it in the bank, among other benefits. UPI has also completely eliminated the physical transaction process, which greatly minimizes the need to visit bank branches and ATMs, further reducing congestion in bank branches, and resulting in faster service.
The UPI ecosystem is crowded with several apps used for digital transactions including Paytm, Google Pay, Phonepe and BHIM. This has been one of the biggest drivers of UPI adoption: merchants and banks do not need to invest in creating their own payment applications, but simply adapt existing apps to include the UPI system.
This is also what drives international adoption. NPCI International Payments Ltd (NIPL), the international arm of NPCI, is in talks with over 30 countries for use of RuPay based credit cards and UPI. In Singapore, a project is underway to connect UPI to the city-state’s instant payment system PayNow by the RBI and the Monetary Authority of Singapore.
What makes UPI the gold standard is its reliability and high levels of trust. Reliability and trust are the cornerstones of use for any financial product – from SIPs to payment gateways. What India needs is the same level of reliability and trust from all aspects of the economy, to achieve India’s vision of an Atmanirbhar Bharat.
The QCI advantage
The Quality Council of India forms the backbone of the ecosystem where it becomes possible for Indian businesses to achieve this level of quality, trust and reliability. QCI’s approach is twofold: One, they help build capacity by making standards, training programs and accreditations available to businesses. Second, they have created an ecosystem of assessors able to help businesses critically review internal processes and systems and make recommendations on actions that need to be taken.
QCI has pioneered several industry standards aimed at ushering in both quality awareness and consumer protection in finance. The National Accreditation Board for Certification Bodies (NABCB) has several accreditation schemes covering Information Technology Service Management Systems (ITSMS), Information Security Management Systems (ISMS), Quality Management Systems (QMS), Trustworthy Digital Repository Management Systems (TDRMS), among others . others.
There are clear advantages to this framework. Multilateral arrangements between national accreditation bodies demonstrate to the international community that Indian businesses are compliant with global requirements. This facilitates participation in global trade, and also generates greater opportunities for the government to state, bilateral and multilateral international trade agreements. It also gives our products and services a competitive advantage.
NABCB accreditation ensures technical expertise of regulators and public organisations. This in turn improves confidence in the products and services they regulate and approve. It also helps harmonization between national regulatory and legal structures.
Accreditation facilitates continuous improvement through periodic assessments, and regular updates of the accreditation guidelines themselves, to keep them in line with global standards. It also creates one framework for risk management through this compliance with international standards, as risk assessment is often baked into the standards themselves.
Governments, industry and consumers recognize the credibility and reliability of the products and services accredited by NABCB. In a sense, these products inherit a level of trust, reliability and consumer confidence from the accreditation process itself.
By creating this framework, QCI is creating railings where Fintech startups can develop reliable, trustworthy products and services. It surprises no one when consumers, even in tier 2,3,4 cities, embrace these solutions. India has the highest Fintech adoption rates in the world.
The ecosystem’s success is evident when we look at how fungible Indian Fintech solutions are to the rest of the world. India’s list of Fintech unicorns is impressive: Paytm, Acko Insurance, BharatPe, BillDesk, Digit Insurance, PhonePe, Pine Labs, Razorpay, Policybazaar, MobiKwik, Zeta, Zerodha, CRED, Slice, CredAvenue, Groww, OneCard, OpenCoin, OneCard, Owit, CoinDCX and Chargebee. By all industry estimates, this trend is only going to grow.
QCI is now extending the success of UPI through the Open Network for Digital Commerce (ONDC). As UPI is to digital payments, ONDC is to e-commerce in India. The Department for Promotion of Industry and Internal Trade (DPIIT) initiated the ONDC project with the aim of giving buyers and sellers visibility and the ability to transact with each other, regardless of the platform or application they use.
ONDC’s rollout is expected to do so dismantling the silos in e-commerce. The ONDC platform will enable merchants to onboard through one app, but interoperate across multiple e-commerce marketplaces, thereby expand their reach to customers across India. It will also enable merchants to plug and play various other services such as payment, delivery, online presence, invoicing and marketing through a single platform, giving both merchants and customers considerable flexibility. This will not only increase competitionbut give one open and equal terms of competition for smaller players which do not have the advertising and marketing budgets larger players have.
This has the potential to be another game changer for both Fintech and Retail in India. At its core, ONDC hopes to create a meritocracy, where the best products with the happiest customers will automatically shine, without the interference of advertising or preferential search, or any of the other benefits e-commerce platforms provide to high-paying, big players. A homegrown marketplace that breaks our dependence on foreign or privately owned marketplaces, which tend to favor themselves, is sure to be good for the economy.
In just the next 5 years, ONDC expects to bring 900 million buyers, 1.2 million sellers and achieve a gross merchandise value of $48 billion. For MSME players, especially those in the process of ZED certification, the ONDC platform has the potential to be their entry point to prominence in Indian markets, and eventually global as well.
India is a big market. Our population alone makes us attractive, but when you combine that with our growing revenues, it makes the Indian market the place to be for brands and businesses of all sizes, globally.
By providing a strong framework that includes both quality assurance, and by creating a marketplace for high-quality products, QCI creates a virtuous cycle that benefits everyone. Homegrown businesses will get the support they need to bring their products and services up to par with international standards and will also have access to a marketplace whose sole agenda is to promote them. Indian consumers, on the other hand, get access to high-quality products and services, reducing India’s dependence on foreign suppliers.
The size of an economy is determined by how much money flows through it. Bringing together the best of Indian businesses with India’s consumer base of over 1 billion, QCI’s Gunvatta se Atmanirbharta motto creates real progress towards India’s goal of a $5 trillion economy.
To know more about QCI, and India’s Gunvatta see Atmanirbharta initiative and the many ways it has impacted our lives, visit https://www.news18.com/qci/
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