NPCI sees significant opportunities in the start-up space in payments: prepaid card companies, analytics, information security consultancy, among others. Wallets have brought a tremendous revolution to the country by changing the user experience. With the UPI, the banking customer can get the same user experience as a wallet customer. This attempt is one of the largest in the world. Banks were initially resistant but some have been very experimental.
UPI licenses to third party (non-bank parties like wallets) have not been opened up currently. Initially Payment Service Providers (PSPs) can be banks only but it is expected that this should be opened up to wallet companies in due course. This is similar to the IMPS model which has gradually been expanded beyond the banks.
Banks are also interesting from a credit card perspective – RBI does not allow non-banks to issue credit cards. However, they have tied-up with a small private sector bank to issue a co-branded card which will be launched in 90-120 days.
