India is still very far away from being a less-cash economy and security issues around digital payments system needed to be addressed to make the mode more acceptable, Nandan Nilekani said Wednesday. Nikelani — who is the chairman of RBI Committee on Digital Payments — said that in the last couple of years, there has been an expansion of forms of digital payments including cards and there are more retail points accepting cards as well as point of sale (POS) devices.
He was addressing the '2019 India Forum of the PCI Security Standards Council' through video conferencing here.
"We are still a very long way from really getting into a less-cash economy, and the reason for that is, cash as you know is very convenient, anybody accepts cash and there is no transaction cost in cash. We are seeing a secular increase in the number of transactions," he said.
Flagging security-related issues with with regard to digital transactions, Nilekani stressed on making the card payments infrastructure more secure in a bid to compete with cash-based system.
"I think increasing number of transactions, at the same time less security issues, less fraud issues, less disputes… could be what we need to see," Nilekani said in a conversation with Nitin Bhatnagar, India Associate Director at PCI Security Standards Council, through a video session.
He said the real challenge is to reduce the cash in the system and go on more and more towards digital payments and make sure whatever the infrastructure is enabled, it competes with cash in some sense.
"And in fact, in that sense, one of my new roles is the chairman of the RBI committee on deepening payments where we are looking at all these issues. Saying that now we're the country where millions of people have cards and other things, but acceptance is the key, getting people to accept and so on. So, I would say that it's in the early stages, but it's a very exciting time."
Bhatnagar said even as there has been a steady increase in the number of cashless transactions in India, chances of cyber attacks have also increased.
"For all of us working in the digital payments network, the real challenge is to create a robust ecosystem that consumers can trust. While we need innovations to continue our march towards a cashless economy, we cannot afford to fall back on security. As the volume of transactions continues to grow in India, payment data security must be a top priority," he said.
Lance J Johnson, PCI SSC Executive Director, said there are significant advancements and growth happening in payments in India.
"As we work to develop global data security standards that support the future of payments, we need India to be a part of this effort," Johnson said.
The PCI forum also discussed about the Indian fintech landscape which continues to expand as the global payment security market size moves towards reaching $43.76 billion by 2025.