IIT Madras Submitted Recommendations To RBI For Strengthening Of Digital Payments Space In India

Indian Institute of Technology Madras (IIT-M) faculty-led Mobile Payment Forum of India (MPFI) has called for developing multilingual payment applications, customer support and grievance redressal in multiple Indian languages. This is a crucial component to increase inclusiveness and the reach of mobile and digital payments in the country. At present, not all official languages are offered as ‘language options’ on Unified Payments Interface (UPI) payment applications.

MPFI, which played an early and key role in developing interoperability and security standards for the Immediate Payment Service (IMPS) and later, the UPI, submitted these recommendations to Nandan Nilekani, Chairman, Reserve Bank of India (RBI) Committee, on the Deepening of Digital Payments.      

IIT-M faculty Gaurav Raina was elected as the Chairman of MPFI, which is a joint initiative of Institute for Development and Research in Banking Technology (IDRBT), Hyderabad and the Rural Technology Business Incubator (RTBI), IIT Madras. Started in 2006, MPFI’s mission is to enable mobile payments and mobile-based financial services for everyone in India.

Highlighting the important aspects of the recommendations made to the RBI, Gaurav Raina, Department of Electrical Engineering, IIT Madras, and Chairman, MPFI, said, “The MPFI recommendations considered three broad perspectives for strengthening the digital payments space, and adding confidence and trust in the Indian consumer. They include (i). User and Merchant perspective, (ii). Regulation, methods and processes, and (iii). Standards for transactions, via channels like SMS”.

He added, “Most MPFI members feel there is still much to be done to increase awareness for the different modes of digital payments among users and merchants,  and also about best practices for user’s security. The MPFI can help by creating videos in different official languages to spread awareness on digital payments. These videos can then be used by all stakeholders in the ecosystem”.

Other key recommendations of the MPFI include focussing on increasing women consumers and using voice-based features in Mobile Apps. The positioning of mobile internet, especially towards payments, may need judicious advertising within the social and cultural context. 

Voice should start playing a key role, at least in the transaction part of the payment. This will enhance usability, and also reduce transaction time. The Forum also pointed out that for a certain fraction of Indians, the current e-commerce symbols may be confusing and this reduces their comfort levels to transact online. Simple and easy navigation and user interfaces that use speech rather than text could help.       

Among the key inputs from users and merchants is that it was important to reduce overall costs for merchants while designing the mobile applications in such a way that it is lightweight and minimizes the process flow to reduce data usage. There should also be clearly communicated guidelines for fees that are charged by banks and payment operators for various digital payment services.         

Further, MPFI also called for all stakeholders to work towards developing an ecosystem that fosters the adoption of digital payments. This can include developing open source designs for point of sale solutions (hardware and software) and book-keeping software.

Among the key recommendations of the MPFI in Rules and Regulations include:

• It will be useful to allow seamless interoperability with a choice to consumers and entities for all non-banks, both from the issuer and the acquirer perspective.  
• With Digital Payments, consumers will start generating a lot of data. It is important to have clear and transparent guidelines on data sharing, as that promotes trust among consumers.
• There should be an agency to certify financial applications and websites across a variety of security parameters.       
• Wider adoption of techniques from data science, machine learning and artificial intelligence should be used across the payments industry. There should be greater awareness and use of techniques and developments from AI that are most suited for digital payments. These emerging and modern techniques could be particularly beneficial for the scaling of solutions that are intended for financial inclusion.     
• Having the feature of recurring payments, in UPI, will greatly increase the usage of the platform. 
• The IT Act should be reviewed for regulatory safeguards pertaining to data protection, storage and transmission.