Card use will return to demonetisation levels: AP Hota, NPCI

MUMBAI: AP Hota has played a major role in developing India's electronic payment platforms -first as head of Reserve Bank of India's newly-created department of payments in 2005 and, since 2008, as the founding CEO of the National Payments Corporation of India ( NPCI). In an interview with TOI, Hota speaks on the future direction of payments and the evolving regulatory approach. Excerpts:

How did regulation turn out to be friendly towards innovation in payments?
The starting point has been the Sudarshan Sen committee on regulating fintech companies constituted by the RBI Regulations are changing al over the world -gradually central banks are moving from rule-based regulation to principle-based regulation.When you adopt the principle, you allow a lot of flexibility in allowing innovation. The clearly articulated approach is one of making payment systems safe, secure, universal, affordable and accessible to all. The RBI has been very pro active so far as new payment technology like mobile is concerned. Only one area where the RBI has not clearly articulated is on blockchain, but they have given a broad hint that they are open to new technology .

There has been debate on whether the demonetisation boost to digital transactions can be sustained...
During demonetisation, point of sales transactions peaked to 5.9 crore in December 2016 from an average 1.3-1.4 crore a month earlier. Since then, it fell to a low of 2.7 crore but is on the rise again. Monthly volumes are higher when compared to the same period in the previous year. So far, monthly volumes have been lower than peak level of December 2016, but I am sure it will soon touch the peak level. Also, demonetisation has seen several new innovations like Bharat QR -the first time ever that four networks Visa, MasterCard, Amex and RuPay came together to create a common acceptance infrastructure. A target was set to increase the number of credit card swipe machines, which was at 15 lakh, to 35 lakh by September 2017. There are already 32 lakh merchants accepting cards and we should achieve the target.

Some industry players say that they should be free to determine pricing of transactions...
When I was heading the payments system department in 2005, real time gross settlement (RTGS) was introduced and banks were charging as much as Rs 20,000 for sending Rs 1 crore.