NPCI To Join Hands With Fintechs To Co-Create Newer Digital Payments Solutions

The National Payments Corporation of India (NPCI) has launched a collaborative initiative to scale up strategic partnerships with payments-oriented fintech players.

Called the NPCI Partner Program (NPP), the initiative will see the payments corporation work with technological service providers (TSPs) and application service providers (ASPs) to build new offerings.

“This one-of-a-kind initiative will help in building new offerings that are better aligned with the needs and demands of the contemporary market. It further aims to augment the retail payments ecosystem by bringing down the time to market and being more transparent and accessible,” NPCI said. 

The initiative has been envisaged as a ‘knowledge-sharing platform’ that will enable the selected fintech startups to participate in NPCI pilot projects and to build a marketplace through community engagement.

“The participants will get early access to ready-to-test APIs and specifications for core development and deployment. Furthermore, by leveraging the relationships, the program will help NPCI and partner organisations expose their brands to new audiences, driving increased awareness,” added NPCI. 

Under the program, the payments body will also conduct exclusive workshops on NPCI products and services that, in turn, will accelerate strategic partnerships within the ecosystem.

As part of the shortlisting process, the applicants will first be evaluated on parameters such as compliance. Subsequently, the selectees will be allowed to apply for pre-certification of their tech stack on NPCI platforms. 

“We are delighted to launch our new Partner Program which will help connect us with innovative and reliable payments-oriented enterprises. Through this program, we aim to design, co-create and go to market with such enterprises under the NPCI Partner Program. Going forward, we aim to drive newer and evolved solutions for the ever-expanding digital payments market through partnerships”, said NPCI’s chief of corporate and fintech relationships, Nalin Bansal.

The Fintech Conundrum

The move is likely part of the government’s bid to counter any attempts by fintech startups to launch products that are purportedly detrimental to the financial safety of Indian customers. 

A case in point was the central bank’s recent move to block non-bank prepaid instruments (PPI) from loading credit lines to safeguard gullible users who fall into the trap of credit cards and credit issuance.

The move also comes on the back of a major crackdown on fintech players in the country. In the recent past, fintech players such as Easebuzz, Cashfree, Paytm and Razorpay have seen enforcement directorate (ED) land on their doors over a host of allegations from money laundering to crypto scams. The ensuing crackdown has seen ED freeze hundreds of crores in Indian currency belonging to many entities parked with these payment processing platforms. 

However, with the announcement, NPCI also aims to collaborate with the fintech industry on a gamut of issues and solve emerging problems, especially in the payments domain. 

This is essentially an extended form of a regulatory sandbox for established as well as novice players to scale up their offerings and devise solutions for new-age problems. Different government arms such as the RBI, in the past, have also deployed regulatory sandboxes to onboard a host of startups to test a clutch of new products.

Previously, RBI worked with multiple startups for its Sandbox for Feature Phone Payments. Eventually, the efforts saw the emergence of players such as ToneTag, Citycash, IND-e-Cash, BHIM Voice, and Eroute Technologies, which can securely process UPI payments over a feature phone. 

With UPI payments volume and transaction count reaching saturation, the NPCI has been working on a host of initiatives such as UPI 123PAY and UPI LITE to scale digital payments to the hinterlands of the country. 

Around 655.01 Cr UPI transactions were processed in September totalling well over INR 10.58 Lakh Cr. The space was largely led by giants such as PhonePe, Google Pay and Paytm.