UPI should continue to be free in India: Paytm's Sharma at BS BFSI summit

Business Standard BFSI Insights Summit: Shekhar said it was earlier easy to raise money based on the company's forecast, but now it can only be done when the company 'exhibits that it can make money'

Unified Payments Interface (UPI) transactions in India should be kept free for customers in India until the majority of the population starts making digital payments, chief executive officer (CEO) of Paytm Vijay Shekhar Sharma said on Wednesday.

"This country should keep UPI free till the period more than a majority of shopkeepers and customers are making payments by digital mobile payments system," Sharma said at the Business Standard BFSI Insight Summit 2022 in Mumbai.

"The secondary and tertiary impact of keeping this [free UPI] on the economy is dramatically large," he added.

Stating that digital payments are increasing rapidly, Shekhar said that in the next five years, the share of digital payments in India's retail payments would jump from 30 per cent to 75 per cent.

"In the next five years, retail payments in India will predominantly shift to digital payments. Retail payments which are in the vicinity of 20-30 per cent today should cross 75-80 per cent," he said.

For companies, it was earlier easy to raise money based on the company's forecast, Shekhar said. Now, the funding can only be raised when it "exhibits that it can make money".

On cash burn, he said that Paytm is "far ahead of expectations on when the company would take the cash burn to block".

Citing card tokenisation, Shekhar said that the Reserve Bank of India (RBI) is "very progressive" for their "ability to bring a solution which normally has not come in anywhere else".

Under tokenisation, customers do not need to provide actual card details while making online payments. On request, a "token" is provided by the card issuer, which can be used in place of the actual card number while transferring money online. It is a unique number.  

Sharma added that he "empathises" with the challenges the central bank faces and "understands why they ask what they ask for".