“Indian banks behind the curve in payments technology, losing business to PhonePe, Google Pay”: Uday Kotak
Uday Kotak, Managing Director, Kotak Mahindra . Bank
Affirming that Indian banks have gone behind the curve in tapping into payment technology, Kotak Mahindra Bank CEO Uday Kotak on Friday said they need to wake up before much of the financial market. Tradition leaves them. Indian bankers have been short-sighted in the payments business for the past few years because they don’t see money in the payments, Kotak said at the Infinity Forum hosted by the International Financial Services Center Authority. IFSCA) and organized by Bloomberg.
As a result, they have allowed the growth of payments via a unified payment interface (UPI) led by two monopolies, Google Pay and PhonePe, with an 85 percent share of the market, he said. It is therefore a wake-up call for the Indian bank, he said: “Wake up, you will see the majority of the traditional financial markets move out.”
“We have to keep in mind that consumer technology companies have revenue models outside of finance. For example, an advertising model or an e-commerce model. By law, banks follow,” he said. Section 6 of the Action Banking Regulations cannot enter into a non-financial business as defined.”
So there are serious problems with how you’re going to draw the lines and at the same time, there’s a problem of financial stability, he said. “I was reading an article that said that when you put a regulated entity in competition with fintech or consumer technology, the standard approach of consumer technology is to play fast and loose on regulation and gain market share at a rapid pace.
“I’m not against competition. All I’m saying is that we need to make sure that in the name of better competitive service we don’t have systemic and stability challenges at the same time.” he said. Recalling Prime Minister Narendra Modi’s assertion that the most important aspect of digital growth is that consumer trust must be protected at all costs.
“So we need to make sure that as we use fintech and grow it, we also have to be clear that we are not betraying trust,” he said. Regarding the homegrown payments ecosystem, Kotak says UPI payments as well as Aadhaar’s unique identity facility for transactions are notable innovations and they can be exported globally.
