India remains heavily cash and paper-based when it comes to making the economy run. But given the rapid adoption of mobile technology across a wide swath of its 1 billion + population, there is a great push towards digitization. In 2009 India set up a National Payments Corporation of India (NPCI) to modernize the retails payment systems across the country. Earlier this year the NPCI announced that a Unified Payments Interface (UPI) was live, with the purpose of managing mobile based money transfers. There has also been a recent announcement by the Indian government that certain paper bills will be demonetized (made illegal for use), a controversial policy designed to both reduce corruption as well as further motivate the population to move towards digital payments means.
In this release, HSBC announces that it has created a UPI adaptation for corporates. They see it as a growth driver as the country further attempts to reduce the amount of cash transactions across the economy. One of the first users is a vehicle financing company, Shriram Transport Finance Company, which will at first use the HSBC platform to collect cash from vehicle owners. Their CEO had the following to say
“The ability to affect a payment through a mobile phone anywhere is of great convenience to the truck driver. In the wake of demonetisation, our adoption of this proposition will also help align to the Government’s objective of boosting digital means of transactions. This is a timely offering which will address significant on ground challenges in the current environment. We really appreciate the Bank’s ability to customise this offering as per industry segment and client account,” he said.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
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