We need to make the UPI ecosystem more sustainable: Ambarish Kenghe from Google Pay

Unified Payment Interface (UPI) transactions processed by Google’s payment app have grown by almost 22% in the past three months, with the platform currently holding nearly 34% of the market share. just behind its big rival PhonePe.

As total UPI transactions in the country surpass the 4 billion mark in October, issues around zero transaction fees and market caps continue to plague payment players.

In an interaction, Ambarish Kenghe, vice president, product management, Google Pay, talks about Google’s perspective on UPI market capitalization, payments infrastructure investments, and new areas of growth.

Edited excerpts:

Google Pay previously raised concerns about the upcoming UPI market cap. What did you send to NPCI? Also, what was your opinion on Merchant Discount Rates (MDR)?

When it comes to market capitalization, we’ve always sort of defended the competition. And, it’s very early on, so we want to make sure there’s enough competition and that’s a good thing.

On the issue of sustainability, I really think we need to somehow do

(UPI) sustainable ecosystem. There are several ways, and I think it’s hard to say if MDR is the right way to go or if there are other ways.

India has always innovated and exceeded. So I don’t know if we are going to move in the direction of MDR or in another direction. But we need to make it (UPI) more sustainable and find ways to understand it.

(The MDR is a small percentage of a transaction charged to merchants by payment actors for digital payment processing.)

Are you going to contain your market share in the future?

The way (market capitalization) is designed indicates that there is time before it applies. And these are the Indian rules that we follow. So right now there is a plan in place where we are working with NCPI and others once the market cap kicks in.

What concerns us is that once it (market cap) is applied, users shouldn’t be affected. And this is also Google Pay’s biggest concern. So we are working with the ecosystem.

(In November 2020, National Payments Corp. of India, which operates UPI, decided to impose a market cap, where payment players can process a maximum of 30% of UPI transaction volumes, in the previous three months. .)

You mentioned the sustainability of the UPI ecosystem. How does Google Pay plan to introduce monetization on its platform? Is the loan an opportunity for Google?

Credit is super underpenetrated. We don’t do any credit directly, although we play in the same ecosystem – similar to the role we play in UPI, where we transfer money but the money goes to the banks.

Likewise, we play a bit of a role with credit through access and instant loans. It’s a story we’ll see over the next five years.

Payment players have suffered in the past from failures by banking partners. How does Google Pay invest in infrastructure to mitigate failure rates and downtime?

I sense that it is public or digital infrastructure; you have to build for the future. If you build for today’s demand, it runs out by the time you build it.

Internally, we monitor the health of various parts of the transaction and try to predict the challenges of a certain transaction. We also enable multiple Virtual Payment Addresses (VPAs) for consumers, and do so in a thoughtful way ensuring that banking partners can take the load – so that if a certain (banking) network is choked, we can route the transaction through another bank.

With the launch of MyShop, how do you envision the kirana-tech coin and enable commerce on Google Pay?

Today, more than 10 million merchants accept Google Pay payments. And traders have been strongly impacted. Even when they have reopened, the same traffic does not come to the store. So we said why they can’t have an online presence directly and that’s what MyShop does as a platform.

In the past, we have piloted credit and provided supplies for businesses where they (traders) can order supplies. This is because in levels 2 and 3, FMCG companies may not visit as much. And these are to scale.

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