For long, we had the Visa and MasterCard duopoly; then came NPCI – and the explosion. How do you read that?
India was a fairly nascent market 10 years ago. The biggest catalytic event was demonetisation; it basically woke the population to the fact that there were other ways to pay… Formation of NPCI, RuPay and UPI has helped the advancement of digitisation. To really see India grow and become a digital commerce powerhouse is going to require multiple players, and that’s fine with me. We expect to continue to invest in this market and see it explode.
We have NPCI exporting its payment technology to other countries. How do you see that? Is a tie-up possible between Visa and NPCI?
There are a lot of discussions to be had about the best ways to proceed. We stand ready to talk to anybody and everybody. This is an ecosystem with partners, and I view everybody as a potential partner, NPCI included.
It is important that all parts of the ecosystem are working to their highest level of efficiency. All the competition is great, but it’s critical we have an even playing field, which creates the best results for the country. It’s going to give you the best innovation you can get.
Here are a number of Indian fintechs that are also looking to go overseas. We actively partner with a number of them and support them. We have partnered with M2P that builds the technology stack for banks and financial institutions to run their cards platform. We have taken a strategic stake in M2P, and we support them in their global expansion plans.
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How do you assess India’s progress in digital payments? What did it do right and where did it go wrong?
I think the story that has happened in India is one of the greatest stories of commerce in the world. Best innovation and best creativity comes from being together. I want government officials, regulators and all key stakeholders to come together and deliberate on the best way to collaborate – to take this to a whole new level. There is tremendous opportunity, but we have to get the right people to sit together to focus on the right issues. The Government of India has been an extremely important catalyst. I don’t think we would be where we are but for the government playing that catalytic role.
There has been criticism about some of its actions too…
But I think a marketplace that has zero MDR (merchant discount rate) is not a good place. It can be a catalytic event for a period of time to get things going, but you have to create some economics for banks, networks and fintechs in order for them to be motivated and have the incentive to do the level of investment and innovation that would give a step function change. I am advocating a much bigger step to go than the step we have taken, and that needs a much more strategic, collaborative approach and even playing field.
So, is there no level playing field as of now?
In certain pockets, it is not as even as I would like it to be. I’m hoping there’s an opportunity to come back and address these things over time because we all have the same objective. There is so much opportunity inside this country to continue to digitise commerce. We haven’t even begun to sign up for acceptance at the level that we can and should in the country.