The recent move by the National Payments Corporation of India (NPCI) to initiate a ‘Unified Payment Interface (UPI)’ which aims to simplify and provide a single interface across all banking payment systems is a welcome decision. It is understood that 30 banks have evinced interest to commence UPI-based services in the new financial year (April 2016-March 2017) in India.
Currently Indian IT companies draw between 25-40% of their revenues from the Banking and Financial Services and Insurance (BFSI) sector. This revenue size of about $35-45 Billion implies that Indian IT continues to draw its sustenance from the BFSI universe.
The last few months saw some big announcements in the e-wallets space in India. Wallet adoption, particularly on mobile, has been quite rapid in India, with wallet based transactions doubling in both number of transactions (153 Million in 2015 vs 67 Million in 2014) and value ($820 Million in 2015 vs $329 Million in 2014) as compared to the previous year (Q4 comparison from RBI data).
The 11 applicants were given a go ahead last year by the RBI to start payments banking services in the country and are readying to start operations around the middle of this year. This will be the Indian central bank's first tryst with pure play fintech enabled service institutions in the country. This will also be a first for several of the licensees planning to operate in this space.