Fintech Industry Calls for Investment in Digital Infrastructure, UPI Fees, and Cybersecurity in Budget 2024

The fintech sector has presented an extensive list of demands for the upcoming Union Budget 2024, focusing on investments in digital public infrastructure, GST exemptions for business correspondent (BC) outlets, and the introduction of fees for UPI transactions. Industry leaders also emphasize the need for policies to enhance cybersecurity and support for advanced technologies such as AI and blockchain.

Ankit Ratan, co-founder and CEO of Signzy, stressed the importance of prioritizing digital infrastructure, financial literacy, and AI-powered credit assessments to improve lending and automate loan processes. Additional suggestions include support for open banking policies, the development of a cloud payments platform for banks, and fostering public-private partnerships.

Bipin Preet Singh, co-founder and CEO of MobiKwik, highlighted the need for clear regulations, tax exemptions, and reduced capital costs to boost profitability and enable access to financial products through partnerships between large public sector banks and fintech companies.

Dilip Modi, founder and CEO of Spice Money, called for a GST exemption on services offered through BC outlets to reduce operational costs and facilitate the provision of financial services in rural and remote areas.

The fintech industry is also seeking clarity on new guidelines and lending practices to support innovation and enhance the digital lending ecosystem, especially for MSME lending. A significant demand is the phased introduction of fees for UPI payments to create monetization opportunities. V Balasubramanian, CEO of Financial Software and Systems, suggested that charging for UPI transactions would allow banks to develop robust payment infrastructure and security standards, protecting consumers from fraud and cybersecurity threats.

Rahul Jain, CFO of NTT DATA Payment Services India, advocated for a subsidy on the merchant discount rate (MDR) charged for UPI transactions through credit cards to make the business model more viable. Currently, an MDR of 2% is levied on UPI-linked RuPay credit card transactions.

Gaurav Jalan, founder and CEO of mPokket, expressed optimism that the government would continue to support the fintech industry as a key driver of easy access to credit and job creation, expecting a favorable approach to investments and regulatory clarity as per Live Mint.