Fintech players expect the newly elected government to opt for a market driven approach to pricing, with a thrust on flexibility and timelines to implement the norms.
They feel that introduction of regulations like sandbox and a no-compromise approach towards safety will drive innovation and security in fintech space.
“It is our belief that the (new) government will take steps to further strengthen the fintech ecosystem in India. With the consumer in mind, the government should introduce regulations that are flexible in nature and benefit multiple stakeholders. The push towards more convenience, cost effectiveness and adoption of technology that make lives easier for every Indian citizen such as UPI, IMPS etc. should be the topmost priority”, said Navtej Singh, chief executive officer (digital business), Hitachi Payment Services.
The government, by juggling its policies with incentives, can deepen online payments in India, a country still largely under penetrated compared with other developing economies.
Himanshu Pujara, managing director, Euronet Services India Pvt Ltd said, “A right mix of policies, regulation and incentives are required to further the fintech space. The government thus far has been extremely supportive by promoting the platform for real time and faster payments, creating an environment that has lead to huge investments in the fintech space which has allowed mushrooming of several hundreds of start-ups who are enabling innovation. Going forward, the government has to ensure that policy and regulation have a coordinated run with industry requirements and innovation to foster creativity, new investments and secure growth of the sector.”
To broaden the presence of digital payments and enhance volume of transactions, a high-level panel led by Infosys co-founder Nandan Nilekani has recommended reduction in costs. The panel backed a cut of 15 basis points in interchange fee on card payments. Another key recommendation made by the panel is the setting up of an Access Development Fund by the Reserve Bank of India (RBI) with the express purpose of developing new merchants in under-served areas.
"The impetus of the panel here is to support cash and digital simultaneously, to provide 24*7 financial access to customers across India. The recommendation to move focus from issuance to acceptance is noteworthy. Overall penetration of payments infrastructure in the country is still considerably low as compared to other economies and a focus on acceptance will bring in more consumers as well as drive usage. Interoperability of transit payments and enhancing of ATM features, will enhance customer convenience and experience. These recommendations to further drive payments penetration and financial inclusion gives confidence to our industry", said Rustom Irani, managing director, Hitachi Payment Services.
According to the RBI's Payments Vision 2021 report, the number of digital transactions is expected to increase to more than four times to 87.07 billion in December 2021 from 20.69 billion in December 2018. The digital payment transaction turnover vis-a-vis gross domestic product (at current market prices) is expected to further increase to 10.37 per cent in 2019, 12.29 per cent in 2020, and 14.80 per cent in 2021.