The National Payments Corporation of India (NPCI) has submitted a bid to the Central Bank of Myanmar (CBM) to build the country’s real-time retail payments system and QR-code generation and repository system, the Economic Times reported. The bid was submitted by NPCI International (NIPL), a recently set up a subsidiary of the NPCI, alongside US-based payments company Euronet.
On the back of its success with the Unified Payments Interface (UPI), the NPCI plans to internationalise UPI and their card network Rupay. NIPL was set up in August this year to export the NPCI’s technical know-how surrounding retail payments systems. In fact, the success of UPI in India has also prompted Google to recommend a similar real-time payments platform to the US Federal Reserve. In September this year, UPI clocked in 180 crore transactions worth around ₹3.29 lakh crore, a growth of 103% YoY in value terms. Between April and September, the NPCI processed nearly 850 crore UPI transactions worth ₹15.5 lakh crore.
Earlier this year, the CBM said that over the next two years it plans to modernise its existing payments infrastructure, implement a real-time retail payments system and establish an automated clearing house, among other objectives. At present, the central bank has a central switching service called the Myanmar Payment Union (MPU) which processes interoperable transactions for all ATM, point-of-sale device, and e-commerce transactions with both domestic debit and credit cards. However the system, which was established in 2012, took some time to stabilise and is only linked the banks in the country.
“It is generally envisaged that acceptance of electronic payments has the potential of growing substantially and at fast pace, especially thanks to asset-lite acquiring,” the CBM said citing the success of QR-code based payments across East Asian economies.
Payment service providers in Myanmar, with support from the CBM, have agreed to implement a standardized common Quick Response (QR) code, called Myanmar Quick Response Code (MMQR). Technical specifications of the MMQR have been endorsed by local banks, international payment schemes, domestic e-money issuers, and the MPU. Implementation of the related QR switch and repository infrastructure is in the pipeline. – Myanmar National Payments System Strategy 2020-2025. [emphasis added]
The CBM says that the standardized QR-code called MMQR should accept payments by both domestic and international payment schemes, providers of e-wallets and banks. The proposed retail payments system will have to be inter-operable, provide broad access, integrates international payments and will have have to ensure switching between all QR code-initiated transactions in the country.
There is tough competition for NPCI as global payments giants Mastercard and Visa are also interested in the CBM project, the ET reported citing an unnamed source. “If the bid goes through, it will be the first among many international projects that NPCI is eyeing in the Asian market, where several economies including Malaysia, UAE and Singapore are on the cusp of mass digitization and seeking to build interoperable networks similar to UPI’s,” a second unnamed source told the newspaper.
NPCI’s international journey so far
Back in November 2017, NPCI began working with the Network for Electronic Transfers (NETS) of Singapore. The initial project involved creating a mechanism through which NETS cards and digital wallets could be used for making payments in India, as well as enabling RuPay-powered debit and credit cards to be accepted at all NETS terminals. Further, in November 2019, the NPCI started working on a project to enable BHIM UPI transactions by scanning the QR-codes at NETS terminals in Singapore. It is unclear whether this project is live or is still under development.
While the NPCI seeks to help the CBM build an inter-operable, real-time payments platform, this is not the entity’s first attempt to enter into Myanmar, which is severely under-banked. In February this year, Myanmar President Win Myint signed a deal with India, during a state visit, to launch the Rupay card. “Both sides agreed to work together to enable the launch of India’s RuPay Card in Myanmar at the earliest, noting that National Payment Corporation of India (NPCI) needs to adhere to Myanmar laws and regulations and that the launch of RuPay Card would stimulate the economy of Myanmar and facilitate tourism and business from India,” the Ministry of External Affairs had said in a statement.
Unlike its parent entity, NIPL was set up as a for-profit entity and is headed by Ritesh Shukla, who previously worked for Mastercard across its Middle East and Africa operations. “NIPL is building huge acceptance network for RuPay and UPI which will help Indian travelers pay with these payment channels in destination country of travel. With the evolution and growth of NIPL network, any Indian travelling to any country across the globe will be able to use our products,” the NPCI said in a statement.
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