Interview

Facilitating cross-border acceptance and remittances in India – interview with NPCI

Monday 24 January 2022 07:17 CET | Editor: Raluca Constantinescu | Interview

Ritesh Shukla, CEO of NPCI International Payments Limited (NIPL): 'Through NPCI International, we aim to facilitate the internationalisation of India’s self-reliant payment system to newer markets, globally.'

What are the main factors that placed the Indian payments market on this exponential growth trajectory in the last couple of years? 

The Indian payments market has seen a massive transformation during the last four years. This transformation hinges around the birth and evolution of UPI, which has reshaped the payments landscape in India, and this is reflected in the volumes that the platform has been processing over the years. In 2020, UPI processed volumes worth USD 457 billion – this is estimated to be around 15% of India’s GDP. If you compare the 2020 performance with the performance in 2017, UPI achieved USD 8 billion, which is a massive CAGR of 285%. Volumes continue to grow, and in October 2021 alone, the platform processed 4.2 billion transactions and delivered commerce totalling over USD 100 billion. This stellar performance is a demonstration of what UPI has achieved in India on financial inclusion and cash displacement; now, merchants of different sizes in both rural and urban areas have digital payments as an option. 

This feature is an outcome of the ecosystem-level collaboration anchored by NPCI under the progressive guidance from the Reserve Bank of India and sponsorship of Government of India. The whole ecosystem has taken immense efforts over the past decade to build this best-in-class payment infrastructure that has carved a niche for itself in the global arena. The growing digital maturity of the population backed by the growing numbers of smartphone users, last-mile internet penetration, and increased digital acceptance infrastructure are the driving factors behind the successful proliferation of digital payments in the country. 

These factors also play a vital role in boosting cross-border ecommerce. What are the main challenges that must be addressed in order to streamline the payments process for cross-border purchases? 

Cross-border payments are fundamentally complex – as opposed to domestic payments, they require incremental work, and that includes forex conversion, settlement, and compliance frameworks to monitor unlawful activities. Adifferent challenge comes from the fact that each country has its own set of processes and functionalities, and the way they operate is often unique. 

The variations may be in areas of: 

  • data/message formats, standards, and mandatory fields; 

  • settlement cycles; 

  • processes and the sequence of steps in a payment process; 

  • scheme rules around liability, turnaround time, dispute management, data protection, and privacy; 

  • functionality, including the usage of aliases or mobile numbers and if there is a confirmation of payee service. 

What steps is NPCI currently taking to facilitate cross-border payments in India? 

Through NPCI International Payments Limited (NIPL), the international subsidiary of NPCI, we aim to facilitate the internationalisation of India’s self-reliant payment system to newer markets, globally. We have achieved great success in developing exemplary robust payments systems in India, and now we are working towards exporting our indigenously developed offerings and innovation acumen at a global scale. Since its rollout, NIPL has entered various strategic partnerships with numerous relevant stakeholders. These collaborations will benefit Indian consumers by allowing them to transact seamlessly and in real time in other countries. 

Recently, NIPL has associated with the Liquid Group, Merchantrade Asia, Lulu Financial Holdings, BENEFIT, and Mashreq Bank, among others, to offer enhanced UPI acceptance and to promote RuPay acceptance and cross-border remittances in markets across Asia. Bhutan has also recently adopted UPI. Another strategic partnership that India and Singapore have entered – spearheaded by the Reserve Bank of India and the Monetary Authority of Singapore – is for enabling UPI–PayNow linkage. This move will enable consumers from both countries to make real-time cross-border fund transfers efficiently and transparently. 

We are actively engaging with partners across the world to build partnerships in areas of cross-border acceptance and remittances. 

With this promising future on the horizon, what can industry stakeholders do to further benefit the growth of cross-border payments in the region and reduce friction? 

Akin to NPCI’s model of an ecosystem-level collaboration in India, NIPL is looking to build strategic collaborations with key stakeholders such as governments, regulators, fintech companies, service providers, exchanges houses, national switches to co-create market-specific solutions. Every geographical region has a specific requirement; therefore, the payment solutions must be tailored to cater to the market needs and preferences. 

Cross-border payments need to be cost-efficient, transparent, made in real time, and integrated with advanced technology. Building a truly interoperable global payments system with other participating nations will enhance the overall customer value proposition and provide user-friendly, convenient transaction alternatives to consumers. Working together with the stakeholders to coordinate regulatory and supervisory frameworks and address the concerns arising from the multijurisdictional nature of cross-border payments will benefit the citizens of the participating nations, by bringing them on common ground, driven by best-in-class tech solutions. 

This interview was first published in our Cross-Border Payments and Ecommerce Report 2021–2022, which taps into the fast-growing cross-border market and provides a comprehensive overview of trends and developments that are pivotal in this space, being the ultimate source of information for ecommerce businesses interested in expanding globally. 

About Ritesh Shukla 

Mr. Ritesh Shukla is the CEO of NIPL. He is responsible for formulating the business strategy, leading business development, and driving profitability by deploying NPCI’s technology and solutions in international markets. With over 20 years of experience, he has worked previously with Mastercard, Visa, and leading financial institutions such as Axis Bank, HDFC Bank, and SBI Cards. He holds an MBA in International Business. 


About NPCI International Payments Limited (NIPL) 

NPCI International Payments Limited (NIPL) is a wholly-owned subsidiary of NPCI. As the international arm of NPCI, NIPL is devoted to the deployment of NPCI’s indigenous, successful real-time payment system Unified Payments Interface (UPI) and card scheme RuPay outside of India. NIPL is focused on transforming payments across the globe with the use of technology and innovation.


Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: NPCI, UPI, merchants, cross-border payments, cross-border ecommerce
Categories: Payments & Commerce
Companies:
Countries: India
This article is part of category

Payments & Commerce






Industry Events