India’s rapidly increasing market for digital payments is posed to get more crowded as the country races to catch up with China in squeezing out the use of cash, according to the head of the South Asian nation’s payments network.
This basically means that Indians will continue to face a bewildering array of payments apps provided by Google, Amazon, Facebook, and others in contrast to China where two home-grown technology giants dominate the market.
Dilip Asbe, the chief executive officer of National Payments Corp. of India said:
“India will remain a multiplayer model where the consumer has a choice to continue to use his bank account, and for the last mile can use any app which he sees fit.” He also added in his recent interview that “We give equal opportunities to both small and large players, unlike China.”
Asbe is pretty confident that is country’s open payments platform will gradually allow it to catch up with China, where Ant Financial’s Alipay and Tencent Holding’s WeChat Pay are omnipresent and have greatly reduced the use cash for payments in the last five years or so. Asbe said:
“China is a target where we have to reach as far as digital payments are concerned.”
The Unified Payments Interface managed NPCI allows any firm to make use of an infrastructure linking all the nation’s banks to create new digital payments services quickly and cheaply. This was created three years ago as a part of a drive to cut down on the use of cash and bring more Indians to the financial system.
Currently, it is known to support around 87 apps offered by Google including PayTM and many other third-party apps, as well as many of the nation’s lenders. Facebook’s WhatsApp payment service remains in beta mode pending government approvals.
Despite its open model and the multitude of competitors, India has a long way to go. Around 72 percent of India’s consumer transactions take place in cash which is double the rate in China, according to a March report by Credit Suisse Group AG.
Navjet Singh, the CEO of digital business at Hitachi Payment services LTD said:
“As a consumer, I do not have the confidence to not withdraw cash, because 70 percent or 80 percent of places where I need to spend the money, digital payments are not accepted.”