In­dia scores in Fla­vors of Fast

The 5th edi­tion of faster pay­ments in­dus­try re­port, Fla­vors of Fast, from global fin­tech leader FIS, demon­strates how quickly the global pay­ments ecosys­tem is evolv­ing. Some of the high­lights from the re­port:

Banking Frontiers - - Payments Systems -

When Fla­vors of Fast was first pub­lished in 2014, there were 14 live faster pay­ments in the en­tire world. In 2018, there are 40 live faster pay­ment schemes, 5 real-time schemes ac­tively pre­par­ing for launch, and 16 more ‘on the radar’.

De­spite the fact that more than half of In­dia’s pop­u­la­tion re­mains off­line, its real-time scheme now pro­cesses nearly 3 mil­lion faster pay­ments trans­ac­tions each day, up from 2 mil­lion a day in 2017. China now pro­cesses more than 25 mil­lion faster pay­ments trans­ac­tions a day, more than dou­ble its 2017 trans­ac­tion vol­ume. Eco­nom­i­cally sig­nif­i­cant re­gions like the United States (US) and Aus­tralia re­cently launched their first real-time schemes, and since its Novem­ber 2017 launch, banks in more than 15 Eu­ro­pean coun­tries, in­clud­ing Ger­many and the United King­dom, have gone live with the SEPA In­stant Credit Trans­fer (SCT Inst) scheme. Mean­while, Hong Kong pre­pares to launch its faster pay­ment rail in fall 2018, as the UK re­con­sid­ers the fu­ture of its mod­ern­ized pay­ments sys­tem and ex­plores new fron­tiers of open bank­ing.


In­dia’s Im­me­di­ate Pay­ment Ser­vice (IMPS) con­tin­ues to be one of the most so­phis­ti­cated and evolved faster pay­ments schemes in the world. It is the only scheme in the 2018 Fla­vors of Fast re­port to re­ceive a ‘5’ rat­ing – the high­est pos­si­ble rank – on our Faster Pay­ments In­no­va­tion In­dex (FPII).

The growth in IMPS’ daily trans­ac­tion vol­umes is partly at­trib­uted to the fact that In­dia has em­braced the smart­phone as a pay­ment ve­hi­cle, but pri­mar­ily it is driven by the ad­di­tional over­lay ser­vices of­fered on top of the faster pay­ments rails. These ser­vices are of­fered through the Uni­fied Pay­ments In­ter­face (UPI), an over­lay on IMPS that gives an ap­pli­ca­tion pro­gram­ming in­ter­face (API) to ap­pli­ca­tion de­vel­op­ers, en­abling the ini­ti­a­tion and col­lec­tion of pay­ments.

In ad­di­tion to the ubiq­uity of smart­phones driv­ing us­age, the growth in UPI-based ser­vices has led to the cre­ation of a wealth of new in­no­va­tive pay­ment so­lu­tions. The adop­tion rates of in­stant pay­ments in In­dia re­flect this con­tin­u­ing evo­lu­tion, with the use of app-based orig­i­nated pay­ments ad­versely im­pact­ing tra­di­tional debit and credit card us­age vol­umes.


Much of the re­cent suc­cess of im­me­di­ate pay­ments in In­dia is at­trib­uted to so­cial me­dia. More specif­i­cally, the speed with which peo­ple have ac­cepted mak­ing pay­ments through their so­cial me­dia plat­forms, rather than bank­ing apps, has been di­rectly re­spon­si­ble for much of the growth. Money trans­fer apps like Google Tez and Paytm pay­ment ser­vices have added chat­ting fea­tures and chat­ting apps like What­sApp and Hike mes­sag­ing now en­able money trans­fers; im­me­di­ate pay­ments are now built into the so­cial fab­ric.

So­cial me­dia apps are con­tin­u­ing to in­no­vate with the use of QR code-based spe­cial of­fers that pro­mote (spon­sored) ser­vices at dis­counted prices. Pro­mot­ing loy­alty, mer­chants can of­fer tem­po­rar­ily dis­counted of­fers through cus­tomers’ pre­ferred so­cial me­dia plat­forms in the form of a QR code. The of­fers can be tai­lored to in­di­vid­u­als us­ing be­hav­ioral an­a­lyt­ics and ge­olo­ca­tion.

With the con­tin­ued de­vel­op­ment of on­line pur­chase tools and in­creas­ing con­sumer ac­cep­tance and con­fi­dence, In­dia, along with other emerg­ing mar­kets, is driv­ing the on­go­ing global ac­cel­er­a­tion of e-com­merce spend­ing. The pro­lif­er­a­tion of smart­phones and tablets has proven a ma­jor driver of this growth. Con­se­quently, In­dia is see­ing rapid de­vel­op­ment of new pay­ment con­cepts and busi­ness struc­tures based on mo­bile in­fra­struc­ture ini­ti­ated by on­line re­tail­ers and pay­ment ser­vice providers.


A re­birth of QR codes is fur­ther driv­ing the adop­tion of im­me­di­ate pay­ments in In­dia, par­tic­u­larly for street sell­ers and taxi ser­vices. A stall­holder can sim­ply dis­play a QR code which the cus­tomer scans, and the pay­ment is done, in­stantly and vir­tu­ally fric­tion­less, with no re­quire­ment to carry a phys­i­cal debit or credit card. The Bharat QR ser­vice, launched by the govern­ment of In­dia in 2017, is an in­ter­op­er­a­ble pay­ment ac­cep­tance so­lu­tion that sup­ports Visa, Master­Card and Amex, and RuPay cards and BHIM-UPI for wider ac­cep­tance. Bharat QR code will en­able rapid roll­out of dig­i­tal pay­ments ac­cep­tance in­fra­struc­ture through­out the coun­try, as it does not in­volve any up­front in­vest­ment in a pointof-sale (POS) de­vice. The Bharat QR code ser­vice also sup­ports dy­namic QR codes, which may be printed on elec­tric­ity bills, gas bills and other util­ity bills so cus­tomers can eas­ily make pay­ments to the re­spec­tive ven­dors. The re­cently launched In­dia Post Pay­ments Bank has re­placed the ATM/ debit card with a QR card that by­passes the ATM net­work for cash with­drawals.

We ex­pect the vol­umes of faster pay­ments to con­tinue grow­ing in In­dia for at least the next five years, driven largely by the in­creas­ing pres­ence of tech­nol­ogy gi­ants into In­dia’s dig­i­tal pay­ments space, and the open ar­chi­tec­ture and in­ter­op­er­abil­ity that UPI of­fers.

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