Partner Bharat Innovation Fund’s Sanjay Jain described India’s success with reform on its payment sector speaking at the Sri Lanka Economic Summit held in Colombo yesterday.
Jain cited Aadhar and Unified Payments Infrastructure (UPI) as being behind the growth of financial services within the population.
Jain said that some people did not have birth certificates and or other documentation and Aadhar helped India create a common identification mechanism to be used by all entities both government and private. After registering with Aadhar recipients are given a unique number based on biometrics and geolocation.
“Number of services delivered to these people has increased. Once people have bank accounts it is a question of transactions. While people have had debit and credit cards for a long time, the number of people has been very small. We introduced the UPI which is a bank to bank transfer. It is not like WeChat or AliPay which behaves like a virtual wallet. This is an existing bank account and comes from one bank to another. It has 2-factor authentications from the mobile itself. It can pull or push payments.”
“This was launched over 3 years ago. Last month we did 900 million transactions. You can see how rapidly mobile technologies have come into payments. It is still growing. On a monthly basis, we are doing more transactions than American Express globally.”
Jain said that innovation had not stopped and future developments were also very exciting. He said “Because of private sector innovation on top of these platforms we are seeing many more use cases. We have seen credit and investment that use APIs. I can do a loan digitally with no friction. We have 200 startups doing digital banking and that number is growing.”
He said “The number of people investing in the stock market through mutual funds is also growing. The number of people involved in the economy on the back of IT is growing. Insurance companies have also shown an uptick.” He said that these laws helped interaction between various entities both private and government. “Based on this set of infrastructure we also have a lot more public platforms. For example, we have a digital certification store, a bill payment system, and toll collection systems on the highways.”
He said there were concerns with regards to data privacy. “One of the new things is on how data can be shared with consent. We have looked at our legal framework on the empowerment side. You want to allow people to use their data, in their control, for their benefit.”
He cited legislation and infrastructure to help ensure privacy. He cited the electronic consent architecture being used by lending entities as hoping to help reduce concerns on privacy.
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