“There is still time for Upi to be a global payment method”

By on April 27, 2022 0

Bombay : Through its joint venture with India’s largest lender State Bank of India (SBI), Hitachi Payment Services Pvt. Ltd, the 100% subsidiary of Japanese Hitachi Ltd, manages back-end operations for one million point-of-sale (PoS) terminals, in addition to another 700,000 terminals with other acquirers. He also worked on the e-Rupi cashless payment voucher acceptance network, supported by an internally developed Unified Payment Interface (UPI). In an interview, Anuj Khosla, General Manager of Digital Business at Hitachi Payment, said that despite overtaking other payment methods, UPI needs more time to become a global player. Edited excerpts:

What kind of work did you do through SBI Payment Services, the joint venture?

The joint venture was formed in 2018 and started operations in January 2019. The idea was that the merchant acquisition business is both technology and distribution focused, and while SBI brought in its distribution, Hitachi brought the technological part.

The JV has started building the digital acceptance fingerprint. The charter was to do all kinds of payments such as PoS, electronic toll (ETC), quick response, or QR, code and now also a payment gateway. Currently, there are nearly one million PoS devices and about 2.6 million merchant touchpoints in total. In the future, the joint venture will bring more technology-driven platforms.

Will UPI become the primary digital payment method?

Although UPI transactions have done extremely well, for it to be a truly global payment method, there is still some time to go.

If you think of a card transaction, it gives you a ubiquitous user experience no matter where you go: whether it’s a gas pump in a remote location in India or a big box store in New York. Some of the other payment methods, although very popular in their respective countries, the user experience is not standard in all geographies.

Do you see a demand for using e-Rupi?

The good thing about the e-Rupi implementation is that it has many use cases. Typically, in a regular QR transaction, the merchant shows the QR and the consumer uses an app to scan it and pay. In e-Rupi, the consumer shows the QR and the merchant must scan it.

We have updated SBI’s Yono Merchant app to accept e-Rupi vouchers. Today, e-Rupi is extended to other use cases such as fertilizer payments, scholarships and other direct benefit transfers. The Reserve Bank of India (RBI) recently raised the limit and allowed the staggered redemption of e-Rupi vouchers. Such steps will help the industry find more use cases.

We are already seeing great interest from state governments in various programs. For example, Karnataka wanted to participate in this for education payments and another state is considering using it for direct fertilizer benefit transfers. As we speak, SBI Payments is discussing these opportunities with governments and state departments to expand the base of e-Rupi.

How important will the role of offline payments be in India?

It is believed that offline payments would only be popular in Tier IV, -V and -VI centers where telecommunications infrastructure is a challenge. If you ask me, sometimes it’s a challenge in big cities too. Try booking a taxi at an airport during rush hour or making a payment at a mall during sales season. Telecommunications bandwidth is choking. My feeling is that offline payments will have many use cases.

That said, there are definitely places where the telecommunications infrastructure is a challenge. Offline payments on airplanes during a flight and other such offline payments are good use cases for offline UPI transactions.

However, I don’t know how quickly it can be done because acquirers have to go present it. This will be the future and I’m sure SBI Payments is in discussion and has done some demonstrations on this. It’s an interesting proposition.

Will central bank digital currency be an opportunity for Hitachi Payment Services?

It’s a very interesting opportunity and we’ve done some work in Japan. As a group, Hitachi has a good track record in value chain management. In India, we also believe that we can play an important role with the SBI once it becomes a reality and we have much more clarity on how it will be implemented. We will also be an important player here, as we have learned from other markets, especially Japan, about how to manage these transactions.

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