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The Unified Payments Interface (UPI) should stay free till digital transfers become the dominant way of using money, said Vijay Shekhar Sharma, the leader of digital payments firm Paytm.
A free UPI will bring in more people into the formal economy and have a multiplier effect, said Sharma, managing director and chief executive officer of One 97 Communications, which operates Paytm. He was speaking at the Business Standard BFSI Insight Summit in Mumbai on Wednesday.
“We believe that this country should keep UPI free till the time…majority of shopkeepers and customers are making payments by digital mobile payment systems…the secondary and tertiary impact of keeping this on (the) economy are dramatically large,” he said.
Digital payments ensure that shopkeepers who earlier did not go through a compliance system for taxation or other purposes have a presence in the formal financial system. This allows the government and the financial system to reach out to such entities for policy purposes, he said.
The future of digital payments will be technologies such as facial recognition. Dramatic changes may be seen in less than five years, he said. Regulators have done a good job in keeping pace, he said in response to a question about regulatory lag relative to technological change.
It is not logical to suggest that regulators are lagging behind the pace of industry innovation, said Sharma. He suggested that regulation can only follow innovation. Regulatory intervention can only come in once the innovation is seen to be scalable and impactful, he said.
While the consumers of securities market regulation are a smaller set than those governed by the banking system which can effectively affect a larger number of Indians, he suggested, there is a significant impact of equity market development on the economy as seen through the potential effect of the regulatory actions of the Securities and Exchange Board of India (Sebi) .
“The markets are complete only when there is…(an)…economical market and there is a market of raising money for the corporates and so on; which in my opinion the new changes that they brought and things like that …(are)…perfectly in the right direction,” he said.
“Every pain stays till the time period it delivers the message it carries,” he said in response to a question on the questions over Paytm’s valuation since the company’s initial public offer. He said that there has been a lot of pain for the company and the message has been received.
In response to questions, he said that being present is a source of happiness. His worries include random unlucky breaks, described as ‘stray bullet’. The biggest satisfaction for him is the potential for India to lead the world and go beyond its image of being an information technology service provider.
“We will be known as (the) consumer technology builder of the world,” said Sharma.
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