We should be allowed to charge for UPI: Worldline India's Ramesh Narasimhan

In a Q&A, the company's CEO dwells on the huge opportunity the payments business provides in India and why there is a sudden rush to acquire an aggregator licence

Ramesh Narasimhan, CEO, Worldline India speaks on what the payments aggregator licence means to the company, in an interaction with Manojit Saha. Edited excerpts:

Why are so many companies rushing to acquire a payments aggregator's licence?

Like any other business opportunity in India, the rapid growth of online payments in over the past few years has encouraged players of all sizes, small and big, to enter the payments business because the government's strategy of JAM (Jan Dhan Aadhar and Mobile), coupled with the availability of broadband and mobile networks, has given a huge fillip to payments. If you look at the fintech industry over the past few years, you will find that it is payments, which is a sub-segment of the fintech industry, that has attracted the maximum amount of venture capital simply because it’s a large country and the digital payments scope to serve the population is very high. It’s a very large opportunity, so I am not surprised that there’s so much interest in launching a payments company in India. The market really is huge; it is growing, and there’s a substantial amount of support from the regulator and the government in growing digital payments, as India moves to a less cash society. So I think all the ingredients are in place to attract so much interest.

You have received a payments aggregator licence from RBI. What positives will such a licence from the regulator bring to your business?

First of all, it is important to ensure the payments industry is healthy, that there is a formal framework set up by the regulator, and that there are guidelines to be followed so that the right kind of players are there in the payments industry.

Secondly, what it does essentially is that it ensures that the right kind of companies are given licences--companies with the right infrastructure, the right people, and the right processes--so that when they handle public money, they are doing it the right way. So I think it’s good for everyone around: for the payment aggregator, for the regulator, and for Indian citizen at large.

The PA business is a low-margin, high-volume game. So if 80 players are entering the market, then for how many of them would the business be sustainable, and what will be the mantra to sustain this business?

You are right about volumes. India is a large country. Volumes will drive profitability, but at the same time, it’s important to understand that you need to price yourself so that you can ensure--through that little profitability and further innovation--that you have what you need to grow the business, support the merchants, and support customers. So this is a fundamental part of being a responsible payment aggregation industry participant in the country, you offer products that make a difference, you charge a little bit of money, and then of course you reinvest that money back into the business.

Do you think UPI should be charged so that the stakeholders feel they have speed in the game and therefore will be keen to invest and innovate in those spaces?

A. We should be allowed to charge something; the logic of charging something to be able to provide services to the general public requires that we be able to monetise it to some extent, and we have always approached the government through the Payments Council of India to represent our position.