Banking in India to leapfrog with implementation of Unified Payment Interface
The government has been pushing us towards becoming a cashless society. This dream is coming closer to reality with the Reserve Bank of India (RBI) expected to come out with the Unified Payment Interface (UPI). Apart from this, the adoption of the Aadhaar, which has enrolled over 1 billion, will usher in this evolution.
The instruments are expected to grow the consumer and SME loan market from $600 billion to $3,020 in the next 10 years, according to a report by Credit Suisse.
The Indian payment system is expected to now leapfrog to digital where cost of transactions will be near zero. The report further adds the customer ownership will rest with the best interface providers and incumbency of deposits will be challenged.
A result of this there will be a change in the business models, which will be redefined and unserved markets will open up as financial providers move from being data poor to data rich.
Mobile banking is something that is changing the ecosystem as barriers of access and reach break. Digitally empowered customers can access instantaneous payment options through authentication of Aadhaar and compare and contrast products from multiple providers.
Ultimately the survival will be of the quickest in this environment and they will best benefit from the $600 billion market. The report expects private banks to best benefit from this.