Beyond cards, Beyond OTPs

Visa is in talks with Indian stakeholders on reviving the New Umbrella Entity (NUE) framework and alternative settlement systems as the global payments giant looks to build interoperability with the Unified Payments Interface ( UPI) and speed up transaction settlements.

"We are in discussions (on NUE)... to have collaboration to see how systems can interoperate, how settlement can be done faster," said Rajat Taneja, president, technology, Visa. This needs to be deployed across the entire ecosystem for hard horizontal problems to be solved. "We have the wherewithal and the aspiration to help, to be part of that discussion, and to do things that help the ecosystem, help consumers, and help merchants," he said.

In January 2019, RBI had invited applications to set up NUEs to reduce concentration risk due to National Payments Corporation of India (NPCI), which operates UPI and other key payment systems. Six consortiums applied, including global tech giants like Facebook, Google and Amazon and Indian players such as Reliance Jio, Tata, Paytm and major banks. The NUEs were meant to build alternative retail payment platforms, manage clearing and settlement, and rival NPCI's dominance. However, in 2022, RBI shelved the plan, opting to focus on strengthening NPCI and the UPI ecosystem instead.

Talking about the growth potential, Taneja said that India's rapid buildout of UPI, DigiLocker and ONDC has set a global benchmark for digital public infrastructure, yet about 50-55% of payments are still made in cash and the country has just 110 million credit cards in use that leaves a vast runway for growth.

Visa is rolling out FlexiCredential, a tokenised digital credential that allows consumers to use a single 16-digit number across debit, credit and installment payments, replacing one-time passwords with biometrics and passkeys. "Cards are just a form factor," Taneja said. "They are plastic, and they are very useful in some cases. We are reimagining this into a single permanent credential-say a 16-digit number-that can work for debit, credit or installments."

He said Visa has been working on biometrics, passkeys and one-click checkouts to ensure interoperability of experiences, remove friction, protect the consumer and move past OTPs with biometrics.

While Visa has been using AI since 1993, Taneja said that it has evolved from simple math equations and now he is seeing the birth of generative AI as a completely different ballgame.

With generative AI, one can imagine a world with digital twins that know users and can delight them or shop on behalf of them. To do that, he said that there is a need for a platform that creates AI-ready credentials that enables transparency, privacy, compliance and ensures that the agent is only doing what you need it to do.