India is unquestionably the forerunner in digital payments worldwide. According to the recent ACI worldwide report, India accounted for the largest number of real-time transactions in 2021 (48.6 billion) – almost threefold that of China (18 billion) and almost seven times those of U.S, Canada, U.K, France and Germany combined (7.5 billion).
Unified Payments Interface (UPI), which is amongst the largest real-time payment systems in the world, is expected to grow to nearly 59 billion in volume by 2023. When the National Payments Council of India (NPCI) set out to create UPI, their vision was simple: they wanted to create an interface that facilitates inter-bank peer-to-peer and person-to-merchant transactions.
The UPI Success Story
Why is UPI so successful? Customers prefer UPI transactions over cash payments, largely due to the ease of payment, the safety of the transaction, and convenience. For payment receivers, it eliminates issues involving cheque defaults, counterfeit notes, tendering exact change, holding large amounts of cash, and needing to deposit it in the bank, among other benefits. UPI has also completely eliminated the physical transaction process, greatly minimising the need to visit bank branches and ATMs, which further reduces congestion in bank branches, and results in faster service.
The UPI ecosystem is crowded with multiple apps used for digital transactions, including Paytm, Google Pay, Phonepe, and BHIM. This has been one of the biggest drivers for UPI adoption: merchants and banks need not invest in creating their own payment applications, but simply adapt existing apps to include the UPI system.
This is also what is driving international adoption. NPCI International Payments Ltd (NIPL), the international arm of the NPCI, is in talks with over 30 countries for the adoption of RuPay-based credit cards and UPI. In Singapore, a project to link UPI with the city-state’s instant payment system PayNow is being undertaken by the RBI and the Monetary Authority of Singapore.
What makes UPI the gold standard is its reliability, and high levels of trust. Reliability and trust are the cornerstones of adoption for any financial product – from SIPs to payment gateways. What India needs is the same level of reliability and trust from all aspects of the economy, to achieve India’s vision of an Atmanirbhar Bharat.
The QCI Advantage
The Quality Council of India forms the backbone of the ecosystem of where achieving this level of quality, trust and reliability becomes possible for Indian businesses. QCI’s approach is two pronged: One, they help build capabilities by making standards, training programs and accreditations available to businesses. Two, they have created an ecosystem of assessors who are able to help businesses critically review internal processes and systems and make recommendations on actions that need to be taken.
The QCI has pioneered several industry standards with a view to usher both quality consciousness and consumer protection in finance. The National Accreditation Board for Certification Bodies (NABCB) has several accreditation schemes that cover Information Technology Service Management Systems (ITSMS), Information Security Management Systems (ISMS), Quality Management Systems (QMS), Trustworthy Digital Repository Management Systems (TDRMS), among others.
There are clear benefits to this framework. Multilateral arrangements between national accreditation bodies demonstrates to the international community that Indian businesses are compliant against global standards of requirements. This facilitates participation in global trade, and also generates greater possibilities of government to government, bilateral and multilateral international trade agreements. It also gives our products and services a competitive edge.
NABCB accreditation assures the technical competence of regulators and government organisations. This in turn, improves the confidence in the products and services they regulate and approve. It also helps in harmonisation between national regulatory and legislative structures.
Accreditation facilitates continuous improvement through periodic assessments, and regular updates to the accreditation guidelines themselves, to keep them in line with global standards. It also creates a risk management framework through this conformity to international standards, as risk assessment is often baked into the standards themselves.
Government, industry and consumers recognize the credibility and reliability of the products and services accredited by NABCB. In a sense, these products inherit a level of trust, reliability and consumer confidence from the process of accreditation itself.
By creating this framework, QCI creates guardrails within which Fintech startups can develop trustworthy, reliable products and services. It surprises no one when consumers, even in tier 2,3,4 cities take to these solutions. India has the highest Fintech adoption rates in the world.
The success of the ecosystem is evident when we look at how fungible Indian Fintech solutions are, to the rest of the world. India’s list of Fintech unicorns is impressive: Paytm, Acko Insurance, BharatPe, BillDesk, Digit Insurance, PhonePe, Pine Labs, Razorpay, Policybazaar, MobiKwik, Zeta, Zerodha, CRED, Slice, CredAvenue, Groww, OneCard, Open, Oxyzo, CoinSwitchKuber, CoinDCX, and Chargebee. By all industry estimates, this trend is only going to grow.
QCI is now expanding on the success of UPI through the Open Network for Digital Commerce (ONDC). As UPI is to digital payments, ONDC is to e-commerce in India. The Department for Promotion of Industry and Internal Trade (DPIIT) initiated the ONDC project with the aim to give buyers and sellers visibility and the ability to transact with one another, irrespective of which platform or application they use.
ONDC’s rollout is expected to dismantle the silos in e-commerce. The ONDC platform will enable merchants to onboard through one app but inter-operate on multiple e-commerce marketplaces, thereby expanding their reach to customers across India. It will also enable merchants to plug and play various other services like payments, delivery, online presence, billing and marketing through a single platform, providing both merchants and customers with considerable flexibility. This won’t just boost competition, but provide an open and level playing field to smaller players who do not have the advertising and marketing budgets bigger players have.
This has the potential to be another game changer for both Fintech and Retail in India. In its essence, ONDC hopes to create a meritocracy, where the best products with the happiest customers will automatically shine, without interference from advertising or preferential search, or any of the other advantages e-commerce platforms give to high paying, large players. A homegrown marketplace that breaks our reliance on foreign or privately owned marketplaces, that tend to favour themselves, is bound to be good for the economy.
In the next 5 years alone, ONDC expects to onboard 900 million buyers, 1.2 million sellers and achieve a gross merchandise value of $48 billion. For MSME players, especially those who are in the process of ZED certification, the ONDC platform has the potential to be their launchpad to prominence in Indian markets, and eventually, global ones too.
India is a huge market. Our population alone makes us attractive, but when you combine it with our growing incomes, it makes the Indian market the place to be for brands and businesses of every size, globally.
By providing a strong framework that includes both quality assurance, and by creating a marketplace for high quality products, QCI is creating a virtuous cycle that benefits everyone. Home grown businesses get the support they need to bring their products and services up to par on international standards, and will also have access to a marketplace whose only agenda is promoting them. Indian consumers, on the other hand, get access to high quality products and services, reducing India’s reliance on foreign providers.
The size of an economy is determined by how much money flows through it. By bringing together the best of Indian businesses with India’s 1 billion plus consumer base, QCI’s Gunvatta se Atmanirbharta motto is creating real world progress towards India’s goal of a $5 Trillion economy.
To know more about QCI, and India’s Gunvatta se Atmanirbharta initiative and the many ways in which it has impacted our lives, visit https://www.news18.com/qci/
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