Home / Companies / People /  ‘There is still time for UPI to be a global payment mode’

MUMBAI : Through its joint venture with India’s largest lender State Bank of India (SBI), Hitachi Payment Services Pvt. Ltd, the wholly-owned subsidiary of Japan’s Hitachi Ltd, has been running back-end operations for a million point-of-sale (PoS) terminals, apart from another 700,000 terminals with other acquirers. It has also been working on the acceptance network for cashless payment voucher e-Rupi, backed by homegrown unified payments interface (UPI). In an interview, Anuj Khosla, chief executive officer, digital business, Hitachi Payment, said despite overtaking other payment modes, UPI needs more time to become a global player. Edited excerpts:


What kind of work have you done through SBI Payment Services, the joint venture?

The JV was formed in 2018 and started operations in January 2019. The idea was that the merchant acquiring business is both technology and distribution-driven, and while SBI brought its distribution, Hitachi brought the technology piece. 

The JV started building the digital acceptance footprint. The charter was to do all kinds of payments such as PoS, electronic toll collection (ETC), quick response, or QR, code and now also a payment gateway. Currently, there are close to a million PoS devices under it and about 2.6 million total merchant touchpoints. Going forward, the JV will bring in more technology-driven platforms.

Will UPI become the primary mode of digital payments?

Although UPI transactions have done extremely well,  for it to be a real global payment mode, there is still some time to go. 

If you think of a card transaction, it gives you a ubiquitous user experience, no matter where you go: whether it is a petrol pump at a remote location in India or a large-format store in New York. Some of the other payment modes, while they are quite popular in their respective countries, the user experience is not standard across geographies.

Are you seeing demand for the use of e-Rupi?

The good thing about e-Rupi implementation is that it has many use cases. Typically, in a regular QR transaction, the merchant shows the QR and the consumer uses an app to scan it and pay. In e-Rupi, the consumer shows the QR and the merchant has to scan. 

We have upgraded SBI’s Yono Merchant app to accept e-Rupi vouchers. Now, e-Rupi is being expanded to other use cases such as fertilizer payments, education scholarships and other direct benefit transfers. The Reserve Bank of India (RBI) recently enhanced the limit and allowed staggered redemption of e-Rupi vouchers. Such steps will help the industry find more use cases. 

We are already seeing a lot of interest from state governments for various programmes. For instance, Karnataka wanted to participate in this for education payments and another state is looking at using it for fertilizer direct benefit transfers. As we speak, SBI Payments is discussing such opportunities with state governments and departments to broad-base the e-Rupi.

How important a role will offline payments play in India?

There is a belief that offline payments would be popular only in tier-IV, -V and -VI centres where telecom infrastructure is a challenge. If you ask me, at times it is a challenge in larger cities as well. Try booking a cab at an airport during peak hours, or making a payment at a mall during the sale season. The telecom bandwidth just chokes. My sense is that offline payments will get many use cases. 

That said, there truly are places where telecom infrastructure is a challenge. Offline payments in aircraft during a flight and other such offline payments are good use cases of offline UPI transactions. 

However, I am not sure how quickly it can be done because the acquirers have to go pitch it. It is going to be the future and I am sure SBI Payments is under discussions and have done a couple of demos on this. It is an interesting proposition.

Will the central bank digital currency be an opportunity for Hitachi Payment Services?

It is a very interesting opportunity and we have done some work in Japan. As a group, Hitachi has some good experience in managing the value chain. In India, we also believe we can play a significant role along with SBI once it becomes a reality and we get far more clarity on how it will be implemented. We will be a significant player here, too, because we have learnings from other markets, especially from Japan, on handling these transactions.


Shayan Ghosh

Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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