The regulator’s measures will drive multi-fold growth in UPI led transactions
FinTech BizNews Service
Mumbai, June 7, 2024: Shaktikanta Das, Governor, the Reserve Bank of India, gave a statement today following MPC meeting. Decisions and Deliberations of the Monetary Policy Committee (MPC) have bearing upon various aspects of lending, investment, saving, digital & IT, Banking liquidity, FPIs inflows etc. Let’s know what are the views of experts in Digital Payments segment.
System-Wide approach to ensure safety and security in digital transactions
Dilip Modi, Founder & CEO of Spice Money: The Reserve Bank’s decision to establish a Digital Payments Intelligence Platform marks a significant advancement for the digital payment ecosystem. As India swiftly ascends to become a digital payment leader, fuelled by the extensive adoption of solutions like UPI and AePS, there has been a concurrent rise in fraudulent activities. The RBI's annual report indicates that digital payment fraud surged more than fivefold, reaching a record Rs1,457 crore in the fiscal year ending March 2024. This initiative aims to address these challenges by underscoring the necessity for a comprehensive, system-wide approach to ensure safety and security in digital transactions.
AePS has been witnessing a surge in fraudulent activities which has affected the trust among rural users. Vulnerabilities have been exploited by scammers resulting in significant financial losses thereby undermining user confidence. Online fraud through the Aadhaar Enabled Payment System (AePS), accounted for 11 percent of online financial scams during 2023, according to an analysis from India's cybercrime unit. While the central bank has already announced its aim to bring a standardized secure onboarding process for all, this initiative can help in curbing the fraudulent activities even further. Strengthening the trust among rural citizens in AePS is vital for the continued growth of the payment ecosystem in rural India.
We at Spice Money have been working tirelessly to ensure the safety and security of our customers. Addressing concerns surrounding AePS has been a top priority for us. We welcome this move by the RBI, which will help in tackling these issues, contributing to creating a robust system. We hope that the benefits of this platform will also extend to AePS, which is a crucial driver of financial inclusion and the UPI for Rural India. The proposed platform's real-time data sharing and network-level intelligence will significantly help in creating a more secure and reliable digital payments environment thereby boosting confidence of the citizens of India.”
Enhancing security and further boost user confidence in digital payments
Jose Thattil, CEO, Phi Commerce: RBI’s initiative to set up a network-level intelligence platform with real-time data sharing across the digital payments ecosystem will surely help mitigate fraudulent digital payment transactions. Led by Mr. A P Hota, with his years of experience, this initiative will enhance security and further boost user confidence in digital payments.
Further, UPI Lite, a popular tool for individuals for making pin-less small payments, will now come under the e-mandate framework by way of which customers need not manually add funds once their wallets run dry. An option to automatically replenish your UPI Lite wallet will be quite beneficial to individuals. These measures will drive multi-fold growth in UPI led transactions" said Jose Thatiil, chief executive officer, Phi Commerce."
Boost to digital payments, reduction in transaction costs
Ritesh Jain, Co-Founder of Flexiloans.com, India’s leading MSME-focused digital lending platform: RBI latest monetary policy decisions are set to significantly benefit MSMEs by maintaining the repo rate at 6.5% and projecting a robust GDP growth of 7.2% for FY25. This reflects strong domestic demand and favorable economic conditions, offering MSMEs expanded market opportunities and financial stability. Additionally, the RBI’s push for digital payments includes integration of UPI Lite into the e-mandate framework to facilitate small-value transactions and allow automatic wallet replenishment when balances fall below set thresholds. This will boost digital payments and reduce transaction costs, thereby enhancing operational efficiency and cash flow management for MSMEs.
The RBI’s policy update provides a stable and supportive outlook for MSMEs and NBFCs. By maintaining the repo rate and projecting higher growth, the RBI reinforces its commitment to fostering a balanced and resilient economic environment. This sets a strong foundation for continued economic development and financial stability, crucial for the growth and success of MSMEs and the broader financial sector.
