Time to go global for India's fintech after UPI success? What experts say

In a panel discussion titled 'Post-UPI, Indian payments players look abroad' at Business Standard's BFSI Summit, fintech leaders expressed their views on what's next after technology like UPI matures

In the past decade, India has become the blueprint for digital payments innovation, and the government has taken the Unified Payments Interface (UPI) beyond Indian shores and into other countries as well. India is currently witnessing an expansion of UPI, with the digital payments system inspiring fintechs to explore foreign markets.

 

In a panel discussion titled 'Post-UPI, Indian payments players look abroad' at Business Standard's BFSI Summit on Thursday, fintech leaders expressed their views on what's next after a technology like UPI matures, and whether they are looking at foreign markets as testing ground for a sustainable revenue model.

 

 

Look for opportunities where we can monetise: Harsh Gupta

 

Harsh Gupta, chief revenue officer, Cashfree, noted that global markets are where the fintech players look to become profitable as the margins are higher compared to India. In Indian markets, the UPI is at almost no cost, making it difficult for them to monetise. However, there is a cost of innovation and compliance that needs to be followed, he said.

 

Lauding the UPI's expansion in India, Gupta said since India has already proven that a strong tech stack can be built, one would like to take it outside India. He highlighted how several countries are now developing digital payment models based on UPI, such as Brazil's Pix, Pay Now in Singapore, and Fed Pay in the US.

 

MSMEs pay 2-8% in cross-border payment fees: Sanjay Tripathy

 

Sanjay Tripathy, founder, BriskPe, shed light on the challenges associated with cross-border payments, including taxation, risk compliance, and the role of SWIFT (Society for Worldwide Interbank Financial Telecommunication). SWIFT is an international communication network that enables banks and financial institutions to exchange information securely about financial transactions, including payments, money transfers, and securities trading.

 

According to Tripathy, the MSMEs handle nearly half of India's $850 billion trade, yet they are compelled to pay 2-8 per cent in fees on cross-border payments. "That’s like losing ₹8 on every ₹100 sent," he said.

 

Trade agreements rely on old financial railroads: Arif Khan

 

Arif Khan, Chief Innovation Officer, Razorpay, noted that while payments don't exist in isolation, they follow trade. However, most trade agreements to date still rely on old financial railroads, ones that haven't adapted to digital money. "Until that changes, efficiency gains will only go so far because, in the end, money still moves through SWIFT," Khan said.

 

Stablecoins and their regulations

 

From a global transaction point of view, stablecoin is becoming a good mode of payment, as far as real-time payment transactions are concerned, Rahul Jain, CFO & CHRO, NTT Data, noted.

 

The panel also shed light on stablecoins and their regulation, highlighting several challenges in cross-border transactions, including the inability to use UPI for international investments and the lack of clarity in TCS (tax collected at source) guidelines. While many countries, including India, are exploring the use of Central Bank Digital Currencies (CBDCs), stablecoins have yet to gain wide acceptance due to concerns over regulation and the absence of central bank backing.