Ajay Banga hails Aadhaar, says India can become global leader in digital payments
India’s early-stage development market is ready for reducing the 95% dependence on cash for payments because of the investment it has made in Aadhaar, says Ajay Banga, president and chief executive of Mastercard, the world’s second-biggest credit card company.
Calling Aadhaar “a stroke of brilliance”, Banga said Indians tend to view credit cards as being different from digital payments when in reality they are part of the same non-cash system which now encompasses everything in consumer payments—whether it is using a card, a phone or a fingerprint.
The key to wider acceptance of digital payment systems is interoperability and in this the biggest opportunity for India is its global capabilities. Banga called on India “to seize the opportunity to be seen as a global leader”.
Accepting that cash will continue to play a role in India as it does all across the world on account of its anonymity and fungibility, the Mastercard CEO however questioned its 95% incidence in the Indian economy, as against 80% in Japan, 78% in Germany and just 50% in the US.
Mastercard, which has been in India since 1986 and has made several investments in local start-ups including payment gateway provider Razorpay, is looking to invest an additional $750 million in
the country over the next three years.
The company will soon be setting up an innovation lab in India to go with ones in the US and Singapore, to build consumer apps on its technology platform.
The company works closely with government and corporations across the world to set up payment systems but also to use data generated from the use of its payment systems, to give a more precise edge to business strategies.
Thus, it is building an entire business-to-business, or B2B, payment system connecting millions of small enterprises across Singapore and South-east Asia to enable simpler payments merely with a click on presentation of the bill.
In India too it is working with state governments including those of Goa and Kerala to enhance tourism potential in the former and set up a global interoperable payment system for the latter’s metro network. This will make Kochi one of the few cities in the world, along with London, Singapore and Hong Kong, to allow commuters to pay for their journey with their contactless credit cards.
Read the full interview here.