Fintech sees a blueprint in RBI’s 3-year payments vision
The Reserve Bank of India’s three-year vision for payments and settlements systems will offer huge opportunities for technology-enabled disruptions in finance, say fintech players.
Merchant acquisition of non-banks, participation of private entities in retail payments and a wider push to electronic mandates will open fresh business avenues for fintech startups, they say.
“While the pursuit towards a ‘less cash’ society continues, accompanied by the ambition to have a less-card India as well, the endeavour is to … serve segments of the population which are hitherto untouched by the payment systems,” the sector regulator outlined in its ‘Vision Document on the Payments and Settlements Systems for 2019-2021’.
A customer-centric approach to ensure prevention of fraud through digital channels puts the onus on banks and digital payments players to ensure stricter security checks and controls, according to the document. The central bank has also stressed heavily on creating consumer awareness.
“Giving access to all regulated entities to acquire their own merchants is a positive step, especially towards NBFCs and is an indication that there could be more access given to these players in the future,” said Naveen Surya, chairman of Fintech Convergence Council, an industry body for fintech companies. FCC has raised the issue in the past about allowing NBFCs to issue their own credit cards.
To smoothen digital payments in rural areas, the central bank will further push for feature phone-based digital payments. It has sought for the USSD system of payments to be strengthened, and innovation in offline payments. NCMC (National Common Mobility Card) was one such innovation, where the transactions can take place without internet connections.
Besides innovation, safety and security have been highlighted as major concerns.
“We will also see a shift towards ISO 20022 (an international payment systems standard) in the coming years, this will provide benefits like interoperability with instant payments and synergies with domestic payment platforms,” said Ramaswamy Venkatachalam, managing director, Banking and Payments at FIS.
The fintech industry, however, said innovations in digital customer onboarding was missing in the vision template.
“Electronic and remote customer onboarding is going to be the key for financial inclusion, there could have been more on that front,” said a top executive of a payments company on the condition of anonymity.
The RBI’s suggestion to create a national settlement account for all card networks could, however, turn out to be a critical step for banks.
“The vision of having a single national settlement account will bring in more efficiency in the system and make the process more refined,” said Mandar Agashe, vice chairman, Sarvatra Technologies.
Source: ET Tech