The India Story – An Inside View – Monica Jasuja – [Season 2 | Episode #10]

Podcast Intro 00:00:01 Hello. Welcome to P.I.T. Exchange, a podcast by Currency Research. Join us as we discuss the latest in payments, innovation and technology with the industry’s most innovative thought leaders. Today’s payments are changing and moving around the world faster than ever before. P.I.T. Exchange gives you the knowledge and insights to keep up. Sit back and relax as we join Currency Research exchanging ideas with today’s special guest.

Jens Seidl 00:00:33 Welcome to another episode of The Pitt Exchange. I am your host for today. My name is Jens Seidl. I’m with Currency Research, and I’ve got a very special guest from India with us today, Monica Jasuja. Hello. Hi.

Monica Jasuja 00:00:46 Hi. Looking forward to this.

Jens Seidl 00:00:47 Excellent. So am I. And before I let you introduce yourself and talk a bit about what you do and what your background is. I always like to to play this little game at the beginning of my episodes and ask three personal questions. So I’m going to start with what do you prefer? On an airplane window or aisle?

Monica Jasuja 00:01:06 Window.

Jens Seidl 00:01:07 Why is that?

Monica Jasuja 00:01:08 Because I get a little bit of room and I can nicely settle myself on the left or on the right, depending whether it’s an E or an F, and I don’t have to jostle for the space where the middle person takes up everything.

Monica Jasuja 00:01:20 And then basically you have to keep fighting. So I prefer that privacy.

Jens Seidl 00:01:24 All right. And what do you prefer? Tea or coffee?

Monica Jasuja 00:01:29 Both. But since I come from India, tea is the thing that I prefer the most. I cannot live without my tea.

Jens Seidl 00:01:35 Do you also drink the spiced chai?

Monica Jasuja 00:01:38 Yes. It is my favorite masala chai at least twice a day. And I also have a lot of coffee, so I’m kind of in between. But two cups of coffee and two cups of tea. The masala tea have to be had every day.

Jens Seidl 00:01:49 That sounds good. And I mean, if you need that much caffeine, you. You’re clearly a very busy person. What do you do to relax and wind down?

Monica Jasuja 00:01:57 I’ll meditate. And I have a class actually in the next 45 minutes. But I love to meditate and also I follow the spiritual path. So for me, I think just trying to be a progressively better person, both for myself and exercising restraint, both mentally as well as on all the vices that we tend to have as humans, has been something that I started practicing and it just keeps me going.

Monica Jasuja 00:02:20 My energy levels are always high when I meditate and almost through the day. I’m always trying to figure out what the best in every situation is and just continue going along and marveling at what the world has to offer to us.

Jens Seidl 00:02:33 All right. Interesting. I think I need to try this again. When I was a lot younger, I tried meditating and I’d never got the groove. So I need to to try this again because it sounds so relaxing and special to get into that state. So good for you. Anyway, let’s dive into the India story, and we’re going to talk a little bit about what’s going on in India today. But before we do, maybe if you want to introduce yourself and tell us a little bit about yourself.

Monica Jasuja 00:03:01 Absolutely. So I’ve been in payment since 2006. I started out as a as an engineer, turned into a product manager for a chat based mobile messenger solution. Back on SMS back in the days. And then I shifted it into the world of payments with PayPal, knowing nothing about how online checkout works and being introduced to this fascinating world of payments where quite honestly, the introduction was really about the user experience and matters associated with how to design a better experience, but without really knowing the intricacies of payments.

Monica Jasuja 00:03:34 And I spent eight years at PayPal across three countries, and it was probably one of the most insightful journeys, both internally as well as externally, to really understand and be fascinated by this world of payments and have really kind of seen the as an. And I can tell you that I’ve never seen an online checkout experience, let alone experienced it, until I came to PayPal. So that’s how far I go. And then I followed it up with another couple of years at Mastercard in India, leading the digital technology solutions for them and also strategic partnerships. After that, I’ve had a stint at leading mobile money solutions, product management with Veeva and then with Gojek as the head of money management in Indonesia. So I’ve stayed in five countries, experienced global solutions, created more global solutions than it has created local. Now I’m the chief expansion and innovation officer for Emerging Payments Association Asia that we are trying to be the place where all payment thought leaders come together and lead the payments revolution in terms of what is coming up next.

Monica Jasuja 00:04:35 And that’s my charter. And I’m also doing the India Connect project, which is what we’re going to be talking about today. It’s a passion project for the CEO, Camilla, as well as for myself in terms of how we bring the India story to the world and we help enable others to see India for what the magic that the digital payments story has been over the last decade and a half.

Jens Seidl 00:04:54 Great. Well, thank you very much for that introduction. That’s been great. And I think it’s a common story I heard a few times now in the last few years, people get so passionate about payments and there’s so much happening in the payments world. You’re clearly one of those people that I think are hooked for life now in the payments world. Well, let’s talk about the the India story then. You just mentioned a project that you’re working on, but maybe even look at this in a wider perspective. If people talk about payment innovation, I think it’s India and the UPI experience, but also Brazil and Pix, these are the two things that typically come up.

Jens Seidl 00:05:32 But for India, I think what always fascinated me was how strategic I think the country was going about driving this innovation agenda. Maybe if I let you tell us a little bit about this experience and what’s been happening in the last few years.

Monica Jasuja 00:05:47 So I’ll start off with a little bit of a personal story. So when I came back to India in 2014. With a payments network, I must admit that the whole cashless experience was a little bit overpowering because there was a lot of cash, and then I’ve actually seen the journey of how India has evolved from being a predominantly cash country, even in tier one cities all the way till now, where at not used cash in the last many years. In fact, I’ve forgotten the color of money. And I always talk about this because the color of money changed because there was demonetization, which was a tectonic shift where some of the notes got, were not legal tender anymore. And that is why new notes were coming out and the color of money changed. So at one point in time, then there was Covid and the entire digital transaction actually took off like a hockey stick.

Monica Jasuja 00:06:36 And there was no going back after. So when you once you stopped using cash, you don’t recognize the color anymore. And the notes kept changing. So recently I’ve had this a major problem where I’ve given away more money than I should have, only because I was supposed to pay for a particular transaction in cash. And this was not a great experience for me because I’m so used to not using cash. Now, having said that, I think most of the world understands India to be 2 or 3 things, and maybe I can talk to you a little bit about it. So it brings people the perspective that I’m gaining from writing this report, by the way, and it’s a little bit of a preview of what’s coming up next month that we are releasing the report. But India’s march towards a trillion transactions or so that we are seeing now hasn’t happened overnight. It’s been a concerted effort over the last two decades, and UPI is the tipping point of what we are hearing. But I think the major railroads had been set a long time back with the with the RBI laying down the systems in place, and India was far ahead even at that time in terms of real time payments, but happening over the retail channels, mostly through internet banking.

Monica Jasuja 00:07:45 And then the world changed because data became really cheap, and we saw this entire revolution of cheap mobile data being available and suddenly users having access to data and mobile phones. And then the world shifted. So instead of a shift from mobile banking to or from using cash to mobile banking and then to phone banking, it just completely it just there was disintermediation of the point that there were mobile first users who had their first access point be a bank which was accessed through a mobile phone. And now, for a country like India, when you think about us, we have 1.5 close to 1.5 billion people, the most populous nation in the world, predominantly still a third world country. And then we have such a large population base which has access to mobile phones, second largest smartphone market in the world and the cheapest mobile data. And you have users who have never, ever accessed anything beyond the internet on a mobile phone and know how to do basic payments and transactions. So the best part about how to understand India and its payment behavior is that there are users who may not even be literate, but they can still do digital transactions with their mobile.

Monica Jasuja 00:09:01 They may not even understand how this technology works, and yet they’re able to change and exchange money between themselves. And I would say that the primary drivers of this entire big story has been 2 or 3 entities, majorly the governments which have played a major role. The regulator, who has been a very progressive regulator, been ahead of their time to actually create an inclusive payments infrastructure which was available for everyone, not just the top of the pyramid, but for everyone when when buildout happens in India. This has been famously said it doesn’t happen for a couple of million. It happens for billions of people, which is why the performance standards are so high. And third, I would say is that the digital economy of India just skyrocketed after telco operators, as well as others in the digital economy started picking up. And this happened because of VC funds and fusion mobile data becoming cheap. Mobile operators playing ball and of course the government providing incentives. And suddenly now we have a economy where about 11 to 12% of all the revenue that is generated comes from the digital economy.

Monica Jasuja 00:10:11 They are the largest, I think 50% of all real time payments across the world happens globally in India. And we have we’re growing at a rate of about 100 x. If you look at the last ten years data. So I don’t know how to like the scale is so massive that I think it’s very difficult for people outside to understand, and they keep asking us whether it’s billions or trillions, but it really is billions and trillions that we’re talking about. So just to give you a just one statement, UPI is doing about half a billion transactions per day today.

Jens Seidl 00:10:44 Which is mind numbing, right? It’s as you said, it’s just on a different scale. But I’d like to pick up on another thing you said there, and that was the different entities that had a big role to play in this, and that includes the government. And looking from the outside in, I was always under the impression that what India was doing was very deliberate and strategic, starting with the introduction of a digital identity, continuing with the introduction of a contactless card to use public transport.

Jens Seidl 00:11:12 Again, people getting used to using tap and go to pay for their transportation. So there were all of these initiatives that led to the into this payment strategy. But go way beyond just payments. Is that is that the right perception out there?

Monica Jasuja 00:11:26 Absolutely. So the India government has coined this term. I would call it government administration. It’s called the JAM Trinity. It’s basically the Jan Dhan Aadhaar account which is a bank account for everyone. So I think there’s a banking penetration rate has increased in India in the high 90s. And in fact, more women have bank accounts now than men. In terms of the Jan Dhan Aadhaar account, which is basically a bank account for everyone. Then there is A, which is Aadhaar, which is your social identity, which allows for biometric verification, as well as KYC, which revolutionized financial products delivery. So till date, there are many financial products where you need to sign a form. Everything is accessible and the eKYC happens to adult and you digitally sign documents. Therefore even onboarding is completely remote, completely done digitally.

Monica Jasuja 00:12:17 And then there is M which is mobile. Now the M in mobile stands for the fact that most Indians now have multiple mobile numbers. In fact, more than one and women also have access to the mobile plus because the bank account is now linked directly to the mobile. So a lot of the subsidies transfer, especially during Covid, started happening directly with mobile infusion, which means that people started receiving messages on direct subsidy transfers to their bank accounts. Therefore, the mobile became an integral part of the financial services ecosystem. So this Jam Trinity is the one that introduced financial and created financial access for everyone. And I would say that the Aadhaar ecosystem, which is social identity, along with eKYC, along with mobile data being really cheap, followed by QR code, which actually happened first during demonetisation and then later with contactless becoming the norm during Covid has just skyrocketed the number of transactions because people just find it really, really simple to transact, whether it’s online or it’s offline.

Jens Seidl 00:13:26 Yes. And I think the other thing I find really encouraging is that people often say that digital payments are the first rung on that ladder to financial inclusion.

Jens Seidl 00:13:36 And what we’re seeing now in India is exactly that happening, right? It was UPI first. Now ULI has been launched as a unified lending initiative. Is it? I know it, never know the I. That’s it. So yes, this is working right. This is building blocks. Really building on top of each other.

Monica Jasuja 00:13:56 Absolutely. So if you look at the building blocks, it is Aadhaar. It is followed by UPI. Then there is ONGC which actually offers marketplace kind of services with access for everyone, whether it’s a person or a small merchant who is doing some local handicrafts in some part of the world, in some part of India remotely, who can sell to anybody. And irrespective of the mainstream platforms that we know, which are the e-commerce marketplaces which are very big in India, followed by what I would call also the account aggregator framework, which actually makes available bank related information again at the touch of a button, and all banks are now participating in it. I feel that the next UPI moment will come when account aggregator framework also kicks off.

Monica Jasuja 00:14:38 It’s it’s one step towards open banking because the infrastructure, therefore the public reels become available so that these kind of use cases can be built on top. And everybody will then have the permission and therefore the authority to authorize banks and other information to be made available to kind of increase their access to credit. And then you have, okay, which is also the open credit enablement network, and then you have ULI which has just been released by the RBI, which is another interface to actually help parameterize how credit will become available, which sources will be available in order to tap for credit history to make credit access India as a highly penetrated credit country. And that is really needed because most of our, our entire lifeline of the country is dependent on MSMEs, which are very small, and they need instant access to credit. So imagine when through a click of a button, you can actually get instant access to credit in less than a couple of seconds. Like, that’s the kind of thing that is there. Which and the underlying reels that are being built right now as we speak.

Jens Seidl 00:15:45 And that’s really game changing right from the times where you need to fill in forms in triplicate, to doing this electronically in seconds, that that changes people’s lives. It really does.

Monica Jasuja 00:15:57 Yes, absolutely. In fact, I must also tell you that there is also very concerted, like India has many states, and sometimes it becomes difficult for anybody outside to understand the central versus the decentralized structure of how the states govern, and how records that are created directly by the state may not be accessible to the entire country. And so therefore the decentralized versus the centralized nature of certain schemes. But even states right now are trying to digitize all their land records so that all this information becomes parametrized and available in a way so that their citizens belong to their remit of geographical region can get impacted by credit being available. And this is where I feel that while the public reels are more central, therefore lie to the entire country, its digitization operations, which are happening in the states, which are increasingly actually having multiplier effects in terms of how this will how the delivery of these initiatives will now happen.

Monica Jasuja 00:16:57 And it doesn’t all need to be controlled by the central government. And that’s also very interesting aspect about India.

Jens Seidl 00:17:04 Fascinating. Anyway, let’s go back to the project you mentioned that you’re working on at the moment. Can you tell us a little bit about that, please?

Monica Jasuja 00:17:11 Absolutely. So this project came around because we’ve been and just like you mentioned at the start, like India is known for UPI earlier it used to be known for snakes, cows, and of course our heritage and our culture. But as I’ve also lived abroad for many years, and I found that there was a huge amount of dissidence in terms of how others perceive India and its pain installing. And quite honestly, even now, I have not done justice to how India has developed its payment infrastructure. I’ve talked about the government. I’ve talked about, of course, policy and regulators. I’ve talked about the central bank. But there are institutions here which are private companies, private owned companies which have actually created history. And we don’t get spoken about very often.

Monica Jasuja 00:17:54 But can you imagine that an international player can today launch its payment operations in India with obviously a local entity set up, etc., and can have access to millions of merchants with just a single click, which means a single one line. Or I wouldn’t call it one line, but one point of integration with a certain operator. Now that’s all possible because this particular operator has actually existed behind the scenes, or I would say front and center of the payments revolution of actually creating those rails which tap into the banks, which tap into these government infrastructures that have been created in order to give this access. So thereby creating a playbook of how you enter a country. Now that’s really relevant and important because India is not hasn’t become what it is primarily at the back of just policy, but also amazing execution. And a lot of VC money and enterprising entrepreneurs who have actually risked everything. So we are actually trying to highlight these stories of these amazing creators who have risked everything, created absolute history, and have created a niche for themselves in the payment space, thereby not just adding value to the shareholder ecosystem, which includes VCs.

Monica Jasuja 00:19:08 And now also because many of them have gone IPO or are planning to go IPO and therefore increase value for their shareholders, but basically create an ecosystem in which there is imagine an entire payment infrastructure, which includes private and public collaboration. And the India model is really the culmination and the best example that I find of public and private sectors coming together and doing something for 1.5 billion people and now going beyond, which is outside the country. So we’re highlighting all these massively important infrastructure players who are doing their bit, not just for India and its citizens, but also for the world, and using this public infrastructure and creating business value, therefore economic value for themselves and others. And I think this is where the entire story kind of pivots on its head, because rather than this becoming about UPI, it’s about all those players who made UPI possible right from the network all the way to the private players who actually got it into the hands of the consumers and many, many consumers. The complete habit shift that has has happened has taken multiple players, and it’s an ecosystem multiplier effect, which I think we will be able to draw in these interviews that we are doing with the top CEOs, where we are talking to them about exactly this and being able to build the story from their perspective, and then also highlighting what will happen in India in the next couple of years, where again, while we here continue to hear about UPI because it’s a massive, massive public infrastructure that has been built as a digital public good, I do feel that there will be you will be hearing many stories about Indian operators taking this playbook global and really integrating within the local infrastructure to be able to use the technology and what India is known for, which is great talent, and being able to create the similar multiplier effect in other countries.

Monica Jasuja 00:21:04 And I think that is something to be really excited about. So that’s what the project is all about for now. And we’ll be releasing this report, which we are looking forward to next month. And some of the insights have been fascinating in terms of what people think about India and of course, how these CEOs have built these amazing businesses.

Jens Seidl 00:21:22 Okay. And I think this is very topical because we just had our Central Bank Payment Conference in Paris a few weeks ago, and there was a lot of talk about resilience, but also geopolitical developments and a desire to become less dependent on certain countries. So let’s be clear. Cloud services, for instance, all of the leading cloud services are based out of the US. So is this an alternative approach to this? Is the whole infrastructure going to be managed out of India or what’s the the sales pitch here if you like.

Monica Jasuja 00:21:57 So India has gone actually has what we call a national power movement which basically means a self sovereignty and self dependence. So I think the the thinking has always been that for infrastructure, which is as critical to its existence as payments, is this which should be owned and operated within India.

Monica Jasuja 00:22:15 And data localisation was one of the earlier mandates that came out. And now there are also stricter rules in terms of being able to legally, first of all, have licenses to operate, etc.. But I would also say that this would be needed because if you think about it, India is a very caste dominant nation still. As we move more towards digital, there is an infrastructure that is dependent on other nations and therefore there becomes the diplomatic and and we’ve seen this in the last two years. A diplomatic relations between two countries have have just completely led a lot of nations to be at their mercy of what these outcomes are likely to be. And it’s very difficult, then, for a nation which is dependent on digital transactions to go ahead. Therefore, we are also seeing the regulator come up with these very innovative policies where they do, I wouldn’t say mandate, but they do have product innovation and build out that makes it easier to adopt local and the. But I would definitely say that the world that we are living in right now, while every nation wants to go local, there is enough room and enough opportunity for there to be open borders and open collaboration between countries.

Monica Jasuja 00:23:22 And this is where I see that the fast payment systems and especially the real time operators across countries where they are doing bilateral ties, etc., is one such example where nobody can really still exist in silos. There will be either regional or bilateral or multilateral collaboration that will still be needed, both in terms of not just data exchange, but in terms of business value being exchanged and that going digital. And that is one step that we are seeing. Also, with CBDCs taking off and central banks putting their weight behind something that they can directly control in order for both retail and wholesale payments to move toward this kind of payment type, therefore reducing the dependence or the risk factors associated with certain primary methods that have been used and have been in existence for a very, very long time.

Jens Seidl 00:24:14 Okay. Maybe let’s let’s try and look a bit more into the future now. What are the next things that you expect will will be coming down this pipeline. I mean there’s there’s a whole lot of talk about CBDCs, for instance.

Jens Seidl 00:24:26 But there’s also other new products, new rails, new user experiences. Where do you see some of these highlights that we’re going to expect in the next few years that are going to come out of this?

Monica Jasuja 00:24:39 I would think, and maybe I’ll pick three. One would definitely be CBDCs. This is going against conventional opinion that CBDCs may not work in India, and there’s no space for CBDCs as compared to, you know, the massive experience of UPI is and what it has been able to achieve. But I tend to differ a little bit because I do think that the central bank definitely has a play, and they’re trying to do something which is going to benefit, I think, more wholesale than retail. And also cross-border. CBDCs is definitely one good use case that still needs to be solved. And business to business payments is another one where I think CBDCs can play a very important role, especially as open trade starts happening. There are guidelines that are being said and data has to be exchanged across borders. We have data protection laws in almost every country.

Monica Jasuja 00:25:29 So there is a need for a currency type to exist, which is backed by fiat, but does not have some of the challenges associated with how money moves. And that can be offset with CBDC. So I see CBDCs do not challenge the dominance of real time payments, but it’s not expected to. And if you try to understand the ethos with which the central banks are coming out and how they are ruling this out, I think you can see a playbook which is it’s meant for all, it’s meant for specific use cases. It’s meant to bring down costs and create efficiencies. And as long as we see that playbook, you see that this will be a long term play, a long play instead of a short play. Second I see is enterprise use cases. We’ve talked a lot about the consumer side of the story, but the business side of the story is still unexplored. We do have UPI for business. B2B payments are always have depended on traditional money movement operators, but as I mentioned earlier, I think Covid has created this tectonic shift with smaller merchants coming in.

Monica Jasuja 00:26:36 Were trying to now become more global. So the question is this will always need to be a use case that has to be solved for. And there are major efficiencies that need to be managed. Also, with invoicing and digital being the primary fulcrum around which a business revolves. So I feel the enterprise use cases is where many of the large players are now putting all their mouth into, so that this leg can be digitized. So the supply chain related issues that normally are dependent on cash can be managed. Many people have tried to do this earlier. Many big companies, fortune 500 companies have tried to solve this, but without payment. Infrastructure, rails as well as support of the government. This is not possible, at least in a nation as big as India. And the third thing for me would be cross-border payments. It actually should be the first thing. It captures all the headlines. But here again, I feel that the first payment. And what is happening around the world with connectivity is going to be the major precursor to what we are going to see, because it’s not about travel and only consumers who are traveling outside, which necessitates this.

Monica Jasuja 00:27:39 I think it is also about governments and nations coming together and trying to identify corridors where exports are happening and trying to digitize that leg beyond dominance and reliance on a primary few currencies. And of course, there will be a lot of ramifications for this. As you know, the change of guard has led up to and and we are all hearing that. So I think it’s an evolving space where we will both see innovation as well as tech related strides being made.

Jens Seidl 00:28:07 Okay. Well, there’s a lot to unpack here. Let me maybe start then from the back. Cross-border payments. My perspective is that the biggest issue that we still need to resolve in cross-border payments is really around remittances, because that is where the reasonably low value transactions, but with very high fees. So those that really cannot afford the fees are also being paid for moving just 200, $250 across the world. So how is there a silver bullet that you can think of that’s going to help with that? Or is it going to be it takes a village to to get this resolved? Is it many, many different things that we need to look at, or do you think there’s 1 or 2 main aspects to focus on?

Monica Jasuja 00:28:49 I think a couple of things would be going where the money is and where is the money flowing from and to.

Monica Jasuja 00:28:55 And if governments, especially bilaterally, are able to work out an arrangement where the immigrants are and where they’re sending money to, and therefore those corridors being prioritized over others, I think the cost will definitely go down. Being a G20 target and being also taken up by the working groups, I see that a lot of movement is already being made. Personally, I feel that the problem or the challenge is always not going to be technology or people. It’s going to be diplomatic relations and exchanges that need to be documented, that need to be agreed on. And these are more diplomatically driven than they are technologically driven. And I think that’s where some of the laggards are, and that’s where some of the challenges are that cannot be resolved with throwing money at a problem. And but we’ve seen that also developed in the last few quarters, specifically with bilateral relations being established and technology players coming together in order to at least open up these corridors. Now comes the part where fees, as well as how much has to be paid for every transaction has to be legally agreed.

Monica Jasuja 00:30:03 And I think almost alone, at least for a couple of years by the two countries or by a couple of countries in a particular region, in order to promote this to their citizens as well as to promote trade. And I think this is where, you know, people ask me always is more money or more resources going to solve the problem? I actually don’t feel that. I actually feel that people sitting across the room, both regulators as well as government officials, as well as technology providers, coming together and really solving this for public good will solve this problem. And this is where a lot of the working groups are actually currently focused on. So I do see this getting solved, but it cannot be solved at the pace of which technology solves problems because the underlying complexities are very, very high.

Jens Seidl 00:30:45 Yes. Looking at the data that the CPMI is publishing from time to time on the cost of remittances, the remittances that are still the most costly ones are the cash to cash remittances, or at least on one side of the equation, having a cash element in it.

Jens Seidl 00:30:59 What do you think is a better strategy here? Is it better to develop more cost effective cash on and off ramps, if you like, into those electronic cross-border solutions? Or do we need to do more work to convince the employers ultimately to pay people electronically rather than in cash to remove that cash element of the remittance?

Monica Jasuja 00:31:20 I actually feel that it’s going to be a combination of factors. Probably it’s also a mix of how fintechs are going to be able to come into this equation and solve this at scale more technologically. Nimbly is possible, but I still feel that this is not just a demand and supply side problem. It’s also got to do with how capital and where the money flows. So it’s about being able to just like, you know, bringing down costs always has an element of governance and policy. And I think that is where it has to come in, because as these governance and policies is able to keep costs capped, at least for a certain amount of time, it will increase the trust in digital transactions.

Monica Jasuja 00:32:01 And then there’s another flipside, which is that as access to digital infrastructure continues to grow across these regions, reliance on cash to cash, for example, will continue to go down. So if there is more technology that is involved. It can solve problems at scale, but when there are people and humans involved, there will always be an element of more people being in the chain. And therefore every value, every player in the chain having a certain value derive from it, which means lesser will go to the intended recipient. This is where I think the shift needs to happen towards digital, and I feel that we haven’t spoken about one element, but which is fraud. So as cross-border transactions start happening, as we start bringing down costs, as technology solves a lot of problems, there will still be the element of fraud and trust in digital that has to grow and the ecosystem has to play a role. Governments have to play a role, and people have to play their role to become digitally literate so that this does not happen and we can move away from cash channels.

Monica Jasuja 00:33:02 But that also requires a lot of decisions. And I think intent, which is there, but it has to be backed up by the ecosystem participation, this is coming together.

Jens Seidl 00:33:13 Very good point. Yes. Let me look back to CBDCs. And I think what you said is something we hear quite often now across the world, that there’s at least short term more promise in the development of wholesale CBDCs than retail CBDCs. I guess Europe is the big exception here with the digital euro, and we’re going to see how that that plays out. But wholesale CBDC, I don’t think there’s any disagreement across the payments community that there are benefits to be had. What I’m curious about is, again, thinking about how strategic India has been across the whole payments development over the last few years. How does the wholesale CBDC strategy line up with the tokenization of real life assets and tokenized deposits and and similar initiatives that are driving towards the tokenization of the asset side of things? Is that also happening in India?

Monica Jasuja 00:34:07 Yes. The tokenization of assets, though, is happening in the tokenizer, there is a paper that has been released by Afca, which is a completely different regulator, and a jurisdiction which is not government and not governed by India, to create a geographical hub, which is basically going to be the fintech hub of the world.

Monica Jasuja 00:34:23 It’s called GIFT City. It’s not bound by the regulator, which is RBI. I feel that the tokenization of real of of real assets, including, for example, real estate, others is going to be something that will originate from there. But whether it becomes real mainstream within the Indian jurisdiction is little hard to be able to identify at the moment because there are so many bigger problems to be solved. I’m not saying that this will not happen. I just feel that the timeline of how this will be solved will probably be utilized at a slightly later point in time. Though obviously conversations are on, there is enough to be said about the regulator being a very vocal about its support for CBDCs, both wholesale and retail retail. We know on some of the use cases that they are trying to solve for what? On the wholesale side, they have expressed both approval as well as cooperation with BIS and certain initiatives that are happening at the regional side to actually consider the wholesale CBDC use cases that will consider movement of money across borders over CBDC routes.

Monica Jasuja 00:35:27 So I think that in terms of the problems and the higher order problems should be solved for one must consider that as far as India is concerned, it is one of the top five economies in the world. But they need to increase their exports and to reduce the dependence on imports. And if there is significant money efficiencies that can be created, then that will be done through CBDCs as a wholesale route, as well as lesser reliance on some of the strongest currencies in the world. And we’ve seen a few examples of those being rolled out. The results of that are debatable, but it does take time for any of these initiatives to get through. So I feel that the tokenization problem, and especially, I would say, the crypto side of assets in terms of how it will be handled by the policy side, implications are still up for grabs. People are still debating how this will all turn out. There’s a very clear policy on how crypto is not legal and there’s a huge amount of tax on it. But in terms of tokenization and everything else, I think still an evolving scene here.

Jens Seidl 00:36:32 This thing.

Jens Seidl 00:36:33 All right. I’m conscious of time. But there’s one more aspect I wanted to touch on. And that is what we’ve again, we’ve seen that in many, many countries around the world, wherever there is such a fast innovation agenda being driven like in India or in other countries as well, that is reasonably easy to to implement in big cities because you’ve got the infrastructure. I think the whole setup is just much better prepared for innovation like that than in very remote, very rural areas. And you touched on that previously. So what what do you think are those key strategies to make sure that nobody gets left behind, and that the people in remote areas will also be able to benefit from, from these new innovations?

Monica Jasuja 00:37:16 So it’s so topical that we’re talking about this today because the government just released an incentive scheme for low value transactions, especially for tier two, tier three India. So it’s thinking which is far ahead of its times, because people have realised that most of the incentives are being paid out to people like who already used to digital transactions and are probably used to the convenience.

Monica Jasuja 00:37:36 Now it’s time to actually build on the momentum and and talk to the people who are still using cash because they just don’t know how to convert money, which is physical money, into a digital wallet. And it seems unlikely that we’re even talking about these things in today’s time. But you have to understand that not every person who owns a mobile phone will still know how to use it beyond social media. And this is very prevalent in South Asia, where a lot of the users the first point of interaction is always social media, and they used to using it for many couple of hours for social media as well as gaming. And that’s the predominant use case. To kind of take the literacy levels all the way to financial transactions is where the money is going to be spent. So more so it’s a demand and supply side. So as more and more merchants start accepting UPI and it becomes easy for them to start accepting digital form payment, users will start using it. This has been one of the biggest learnings that even in in mainstream India with tier one India, where if the UPI incentives are not there or the zero amber was not there, many of the merchants didn’t want to accept it for the reasons including tax.

Monica Jasuja 00:38:44 But now that hesitation has gone away. Consumers are just using digital all the time. Now. If this has to be replicated across rural, then we need products that they understand, and we also need technology that they’re able to understand, but also a financial literacy campaign. And a lot of this has to be driven by public money in order for them to understand, first of all, how to build a trust in digital transactions, how to use digitally or digital transactions without being spoofed or fished or pan and defrauded. And last would be how to actually get access that they probably know how to. But being able to onboard, for example, simply being able to use self-help groups or other groups and also increase access to the marginalized. So there have been a lot of work that has been done, especially for women, and to bring the next set of women, which is about 200 million women within the API ecosystem, because women tend to have access to the mobile phone. But there’s still a gender gap.

Monica Jasuja 00:39:45 Now, as far as the utilization of these products is concerned, India has a lot of languages. I think language availability and being able to create these apps which have language interfaces is going to be critical. But so is the digital literacy campaign, which the governments have kicked off along with the ecosystem partners, along with incentives that is going to help with the realization that the next wave of users will come into the digital economy, will not be from tier one and tier two cities, but will be from rural India. And we normally talk about the divide between rural and urban, and that will go away. But to everyone’s surprise, there’s one thing that I must say about UPL that it’s available in for the most not part of India, all the way up to the southern part. In fact, even in islands which are so far remote that even going to that island typically takes a couple of hours from the southernmost part of India. So even there, UPI is definitely available everywhere, but how much it’s used has to still be further widespread.

Monica Jasuja 00:40:46 And that is where I feel that most of the ecosystem participants are enthused by the opportunity that still lies ahead. There’s so much more that can be done for this to become mainstream. And I would still say this. This is one of my passion Topics as there is something we all feel very strongly about. I don’t think it is for us to be able to provide filters on who will get access to UPI or any other payments ecosystem. I think we should make it accessible for everyone, and we should allow everyone to be able to use it, regardless of their economic potential and what they have. They should have access to it. They should be able to use it with whatever they have, whether it’s a feature phone, it’s a smartphone, whether they have data access, whether they don’t. But it’s not for us to tell them just because they don’t have data access. Therefore, they cannot have access to a system that is has been made for 1.5 billion Indians. And there are enough. There is also enough being done right now to create financial products that are really meant for the offline space, where you can still use these financial products, but you don’t need to have access to the internet, and you don’t even need to have access to the smartphone, but they need to become more pervasive than they are right.

Jens Seidl 00:42:00 Absolutely. Which again closes that loop to financial inclusion. I think that’s exactly what you summarized there. Nobody will be left behind. You’re rolling out an infrastructure that everybody will be able to enjoy, which is amazing. Monica, I’d love to keep talking about this because it’s really fascinating, but I’m aware that in a few minutes you’re going to start your meditation session. So I don’t want to stay or stand in the way of that. But before I let you go, maybe I’ll give you the opportunity. A few last closing words. What’s what’s your outlook for the India stories? Is there going to be a happy end? How is this going to continue?

Monica Jasuja 00:42:32 Well, as an Indian, I would hope that the Indian story continues. And if we keep making noise for all the right reasons. But I also feel that I think there’s a lot to learn from how India has done it. But even the world has been making a lot of strides. And I think as an ecosystem and as a world as, you know, a global place that we’ve all become because we are digitally connected without borders.

Monica Jasuja 00:42:54 I think it’s important for us to understand how one country does it and maybe take the best practices from that country, take it elsewhere and make this available for everyone. Because, again, I think we’ve seen that way for a very long period of time. Even in the 21st century, there are many who are still excluded. But we need to be able to solve and create technology solutions for everyone. And India has shown us how we do it, but there’s still such a long way to go. So I think the opportunity is immense. And as payment professionals or as anyone who’s in this space, India, I feel because of also its talent and also what the governments have been pushing for, will continue to make the headlines. But I feel that I want the headlines to go far beyond the numbers and talk about how business value is being created. And we have sustainable businesses and ecosystems that are benefiting 1.5 billion or maybe even a larger population in the world. And that would be a great day for all of us who are who, you know, carry a lot of pride associated with being Indian and being able to contribute to global firms.

Monica Jasuja 00:43:55 So it’s time for the India flag to be, you know, flying really, really high. And the whole globe comes together so that we are able to solve solutions for the 8 or 9 billion people in the world.

Jens Seidl 00:44:07 Hear hear I like the sentiment of that. Thank you so much for being here today with us, Monica. And this was a fascinating conversation. Thank you.

Monica Jasuja 00:44:15 Thank you so much, and thank you for inviting me. It’s been a pleasure to speak to you. I’m sure we’ll be meeting up soon. And thank you for caring for the India story.

Jens Seidl 00:44:23 I hope so, definitely. Thank you very much. All right. So that concludes our episode for today, the India Story. Thank you all very much for listening in. Please do like follow. Do what you need to do on your podcast platform to make sure you won’t miss the next episode. Bye bye!

Podcast Outro 00:44:39 Thank you for listening to The P.I.T. Exchange, a podcast by Currency Research. Check out our upcoming events and publications at currencyresearch.com, and join us for our next episode to hear what’s trending in payments, innovation and technology.