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Empowering India’s Digital Banking Revolution
India, November 08, 2022 /mid-day.com/ In conversation with Mr. Parag Desai – CIO, Montran India, he talks about Montran’s journey and its contribution in empowering India’s payment landscape.
1. Montran India’s journey in the space of Digital payment system
Pioneers in comprehensive payment solutions and services, Montran has been powering financial businesses with solutions that integrate seamlessly into the payments ecosystem. Montran’s avenue into the Indian payments landscape began in the year 2012 with implementation of regulatory solutions for the country’s central banking infrastructure. With introduction of the Direct Benefit Transfer (DBT) scheme in 2013, the main objective of this scheme was to ensure direct transfer of government benefit payments to beneficiaries’ bank accounts, thus bringing in efficiency, effectiveness and accountability in the payment system. The rollout of Aadhaar and linking of beneficiaries’ Aadhaar numbers to their accounts aided tracking of payments and transparency of funds. This initiative resulted in a surge in high-volume low-value payments. Montran’s solutions accelerated this payments growth through its robust payment systems. Since then, Montran has implemented solutions for various financial institutions across the globe, delivering quality and excellence in the payments landscape. Montran has powered critical financial systems with consistency and integrity through its key aspects of scalability, security, stability, reliability and technology.
2. Please share your views on the emergence and Rise of Real-Time Payments in India and globally
One of the most significant financial innovations in the last decade has been the emergence of Real-Time Payments (RTP). The steady transition from cash towards a digital economy has propelled Asia to the top of the tree in regard to Real Time Payments. Since the inception of Real-Time Payments system UPI in 2016, UPI has evolved drastically. Counted as one of the most successful Real-Time Payment systems, UPI processed approximately 39 billion transactions totaling USD 940 billion globally, equivalent to 31% of India’s GDP in 2022. Over 56 countries around the globe have enabled real-time payments, accounting for almost one-third of the world’s countries. UPI, as a Real-Time Payment, provides significant benefits to financial enterprises, merchants, end customers and the society, by enhancing payment visibility. Real Time Payments have accelerated the growth of Business-to-Business alliances in the nation.
3. According to you, what are the trending digital Payments methods in India?
The digital payments ecosystem in India has witnessed a significant growth in traction, particularly in recent years. This may be attributed to the introduction of initiatives such as UPI, NFS, and BBPS. The COVID-19 outbreak and accompanying social distancing norms accelerated this growth. The evolving digital payment trends will change the payments landscape even further.
- Central Bank Digital Currency (CBDC) will gradually take center stage.
- Open Network for Digital Commerce (ONDC) has been indigenously curated for e-commerce solutions.
- Payment Aggregators will enhance payment experience on e-commerce sites.
- The country will perceive a rapid increase in the adoption of Card tokenization.
- BNPL is already taking the e-commerce industry by storm and will continue to do so.
- Payment systems, especially solutions like UPI, will adopt Blockchain technology.
- Utilization of Artificial Intelligence and Machine Learning for effective detection and prevention of threats will further secure the payments landscape.
4. What is the Future of Banking and Fintech in India?
The banking domain is currently undergoing a transformation with the avenue of FinTechs into the BFSI sector. Industry reports state that India’s FinTech industry will witness a growth of USD 150 billion in the next five years. FinTech has triggered a fundamental shift in the financial services sector, making financial businesses customer-centric and service-oriented. India is the first country globally that has established itself as one of the fasting-growing economies owing to the emergence of Fintech startups. This FinTech growth may be attributed to a number of factors, including the government’s pro-digitization and pro-startup initiatives. With several payment innovations announced in recent years, including UPI, Aadhaar for eKYC, BharatPay for QR-based payments, biometric payments (AEPS), e-wallets, sound-wave-based payments for rural engagements, and last-mile connectivity, these initiatives demonstrate that India is carving out a niche for itself in FinTech-driven innovations, primarily focused on urban and rural segments.
5. What is Open Banking and how it is beneficial for banks and consumers?
Open Banking is an API-based banking ecosystem aimed at sharing financial information, necessary for the development of financial products and services. In contrast to traditional centralized financial data management, Open Banking is based on a technological network of various financial institutions, facilitating efficient exchange of information. The primary goal of Open Banking was to boost innovation, competitiveness and transparency amongst financial institutions. For financial enterprises, mainly startups, Open Banking provides a horde of benefits, authorizing non-banking companies to offer banking products and services to the market. End-to-end visibility of finances, low cost and faster services are additional advantages that Open Banking offers its users. Users also possess a wide range of banking options and a preference of choosing from multiple service providers. To summarize, Open Banking enables customers control their finances and help make informed financial decisions.