Mr. Naveen Surya’s interaction with Economic Times

The Economic Times , November 23, 2016

There has been a sudden demand for e-payment forums: Naveen Surya, Payments Council of India 

ET Now: Different digital players we have spoken to have said that their traction has increased, but have you seen any kind of disruptions in payment or completion of transactions or otherwise?

Naveen Surya: I think the disruption is happening multi-fold. Everyone’s transactions are growing, the transaction interactions that you would not imagine before like a paani puri wala or a vegetable vendor. The sudden demand of accepting digital payment has grown actually multi fold. The person who would always only take cash will say okay please is there a way I can start accepting payments otherwise. 

ET Now: Adoption of new payment options doesn’t seem to be a challenge, it is a way of life that has come in pretty quickly?

Naveen Surya: Absolutely. I always had this philosophy that physical cash is a disease in our country, even 10 years back and I think we needed to cure it. Somebody needed to sort it from the top and that is what has happened. 

ET Now: How is your interaction with the payment bank owners changing in terms of what you are advising them to do to scale up to the rising opportunity?

Naveen Surya: So one, I think the beneficiary is every player whether it is a bank, an e-wallet player, a payment bank or a small finance bank, every player who is a part of digital payment ecosystem today is growing. Our interaction with regulators has been highly proactive, if you see yesterday’s guidelines it has happened in a matter of three days, we all realise that there is a completely new ecosystem of the merchants who were earlier not willing to adopt are suddenly asking. These are not traditional shops, these are individual self-employed people, mechanics, vegetable vendors, they need a very different type of an approach to enroll them in this. So we actually went and talked to the regulator and a new kind of wallet was created for them where they can accept money up to Rs 20000, keep the balances up to Rs 20000, up to Rs 50000 they can just transfer into a bank account, all they need to do is at the time of enrolment they need to make sure that a particular bank which they are going to use. Our government regulator and the industry is seeing that this is a unique opportunity which has created demand.

ET Now: The way is forward, definitely.

Naveen Surya: Our belief is that this is an opportunity to bring a complete different set of a people in, once they come in they experience it in this next 50 days they would stick to it because this is a great experience and a better experience than cash. 

ET Now: Could you put numbers in terms of the opportunity size?

Naveen Surya: The industry currently in terms of digital payment, if you look at the retail payments in the country is about $2 trillion of which about 10% happens digitally. If you look at now the breakup of different players, how different players stack up in the 10% of digital, you have credit cards was about let us close to about 30% of the payments, you have debit card which is another about 30%, you have net banking is about close to 20%, remaining 20% is all the he authorised payment service provider e-wallet companies like all ours. So this is how it is. Now if you look at the growth rate in the last three years, the credit card has been around 20-30%, debit card has been around close to 40%, net banking has been about 25-30%, all these e-wallet companies like ours has been growing at already 60-70% . What it means is that this step that has happened, if you look at this 10% and if we compare ourselves with the BRICS countries, we are actually at about 10 while everyone else has move at 30 to 50. Now if without demonetisation we would have probably reached 50 in probably five plus years, with this happening now you can suddenly believe by the way we can reach there probably in two to three years. What does it mean, at the industry CAGR level what was at an average of about 60-70% is suddenly is likely to be about 200%.