QR code: A simple solution targeting MSME merchants

QR code: A simple solution targeting MSME merchants

Jescilia KarayamparambilUpdated: Thursday, May 30, 2019, 10:30 AM IST
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Competition in the digital payment space is growing and every player is trying to innovate and find its own niche. At the same time, when required companies like MasterCard, Visa and Rupay join hands to further strengthen the eco-system. Murali Nair, SVP, market development, South Asia at MasterCard talks about journey of MasterCard and plans with QR code initiatives.

How has the journey been for MasterCard in India?

MasterCard has been in the country for last 24 years and the run for MasterCard has been fantastic in the country. Over years, we have worked with several banks and also with governments. We are not just a card company which many company think about us. We are a payment technology leader. Of late, we are very proud that we have invested heavily in the country. We have offices in Pune, Baroda, Delhi, Mumbai and Bangalore. We have 13 per cent of our global work force operating out of India. We are committed to India and its growth story. For last two years, we have invested over USD 250 million to grow our business in India.

In demonetisation perspective, it is something that will change India for something better. This will lead India to a cashless society and we are delighted to have this process.

INDIA could save `500 cr if it increases the share of digital payment by 5 %”

Compared to other countries, how do you think India has improved over years in terms of legislation?

I was reviewing what Indian government has done post demonetisation. In terms of the changes done between the RBI (Reserve Bank of India) and government, there have been 15-16 notifications, whether it is waiving off excise duty or any other changes on easing the KYC norms for customers and merchants alike, whether it is about incentivising LIC payment and so on. The sheer volume of activity that has happened in recent times is fantastic from the point of view of what the government is doing. We are encouraged the way things have taken shape. Post demonetisation, we have seen the government taking progressive decisions.

India is in a unique position for several reasons. From being the fastest growing economy combined with the digital push the government is taking, we are in the forefront of the digital change. India uses more than four times the cash used in Brazil, Mexico and South Africa. India could save Rs 500 crore if it increases the share of digital payment by 5 per cent. According to a study in 2014, the cost of managing cash in the system for RBI is Rs 21, 000 crore. This is the amount that we can save if we went digital.

What are the various trends that MasterCard saw post demonetisation? Can you share some figures on the same?

Post demonetisation, there has been increase in the debit card transactions compared to credit cards. Debit cards are used more and more for lower value transaction. From our point of view, it is a change. Through our campaign ‘Embrace the Change’, we are trying to promote the use of debit cards. It is a great move towards forming a habit and moving consumers to more and more card or electronic payment.

Until December 31, 2016, the transactions fee has been waived off. So, when do you plan to recover that cost incurred during that period?

That is the contribution we have made from our side and that is the contribution that the eco-system has made from its side. This is to give a digital push to all the transactions. There is lot of cash in the system. Demonetisation would have an impact on the shadow economy and all the evils like terrorism can be curtailed through digital transactions. I think that is the way to look at it.

THE cost of managing cash in the system for RBI is `21, 000 cr ”

When do you see growth in digital translate in your balance sheet?

In terms of medium to long-term opportunities, the road is long and positive for us. Thus, we are positive about our future prospect in India. We are inclined to support not just the government but our customers. We want to ensure that we are secular as we move towards making India cashless that is our focus.

What are the various campaigns or initiatives that are taking place to promote MasterCard?

We are running the campaign ‘Embrace the change’ that is creating awareness among the customers the positives of using debit card, in support to the government’s digital drive.

Simultaneously, we have been working with the Confederation of All India Traders. It’s an association that represents 5.9 crore merchants. They have been partners with us for more than 2 years. We are running a campaign with them called the ‘Master your card’. We educate the members on the benefits of acceptance of card. We share with them learning on how their business can benefit and how digital payment can boost and sustain their business. We have done campaigns to educate them and get them digitised. We will continue to do it in short to medium term.

How difficult is to create awareness about dealing with various security risks?

In ‘Master your card’ campaign, we try explaining them about the levels of safety MasterCard brings to digital transactions. We are in forefront of driving safety and security and it is one of the corner stone of our global technology strategy.  Our approach towards safety and security is at three levels. In the level of consumer, we have encryption in terms of what they do with their debit or credit cards. Second level of safety, we have product like SafeNet which help our customers to help monitor transactions on regular basis, to make sure if there are any fraudulent attempts which can be nipped in the bud. The highest level is the enterprises level security which is monitored globally. We are a global company and we look at transactions across the world that is a system level security that we offer. That is something that we inform our merchant partners and our banks in the regular basis.

MasterCard had recently released QR code with RBL bank. Are we looking at any such development any time soon?

The government is pushing QR code and we are working with several banks partners. You will hear about QR code from banks or from us shortly. It is a great technology and it is solution that will help MSME merchants. This solution will be enjoyed by the customers. We are confided that many will adopt this solution.

 Do you think with enter of Rupay, there is a new pace to the competition in the debit card space?

Competition is good as it encourages innovation and quicker adoption of technology. Share of India’s digital transactions is in single digit. Thus, there is space for everyone. Competition only makes it better and we will gain by the digital push of the government. Everyone in the eco-system will gain through this digital push of the government.

For the QR code standards, MasterCard, Visa and Rupay has join hands to pitch the common standards that are out now. This QR code based transaction can be done through any card that is the approach that we have taken.

Rupay debit card has strong presence in rural India. Would MasterCard follow a different strategy in that space?

We work with CIAT for that and we do not have urban bias at all. We are working with the confederation to digitise the entire country over a period of time. The QR code can be pushed into smaller and smaller cities as it is a technology that can be easily deployed. We are looking at it as a strategy.

What would have been the future of electronic payment system, if demonetisation had not taken place?

Even before demonetisation, Indian electronic payments were supposed to grow exponentially. If you look at Google and Boston Consulting group papers in a study published in July 2016, the market could have been worth USD 500 billion (or ten times of the present market) by 2020.

With government’s push towards supporting point of sale machines and QR initiative, it will lay the ground for good growth in the industry in the next 6-12 months.

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