NPCI’s Voice-Based Payment Solution Could Be a Game Changer

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The National Payment Corporation of India (NPCI), known for developing and managing first of its kind Unified Payment Interface (UPI) and Aadhaar Enabled Payment (AePS), is once again gearing up for a new voice-based payment solution. The solution has the potential to disrupt the flourishing digital payments industry.

The voice-based payment solution is aimed at feature phone users in remote areas. The service is likely to be rolled out on top of the interoperable UPI protocol.

Codenamed as Interactive Voice Response (IVR) payment project, the solution is currently in the beta testing phase. According to media reports, pilot testing has been kicked off. Reserve Bank of India (RBI) is closely monitoring these pilot runs as per provisions laid under the central bank’s Regulatory Sandbox (RS).

NPCI Voice Based Payment Solution: Big Picture

  • After making UPI the most preferred payment mode among smartphone users in India, NPCI aims to provide similar solutions to feature phone users.
  • The sizeable share of feature phone users in the country, especially in Tier-2 and Tier-3 cities and remote areas, has convinced NPCI to launch a voice-based instant payment solution that could provide a UPI-like payment facility.
  • There are over 400 million mobile phone users in India that are still hooked on feature phones.
  • To use the voice-based payment solution feature phone users won’t need any third-party app for internet connectivity.
  • The NPCI’s voice-based payment solution is similar to USSD and IVR-based solutions that were highly popular until 2010. Telecom operators used to offer various Mobile Value Added Services (MVAS), such as Ring Tone, Caller Tune etc, through IVR-based solutions only then.
  • The NPCI’s IVR-based payment solution is being created by Bengaluru-based fintech Ubona technologies, closely working with a private bank currently enabling transactions in the background.
  • The solution will allow feature phone users to make payments to merchants and person-to-person (P2P). Feature phone users will have to generate a PIN number that would secure every transaction. This PIN would be linked to their bank account as well debit cards. It is similar to UPI PIN that smartphone users have to generate one time and authenticate their every UPI transaction.
  • For ease of usage, the IVR-based payment solution for feature phone suers will allow them to communicate in their regional language.

Food For Thought

NPCI’s payment solution is developed to connect millions of feature phone users with the digital payment system. However, the solution is currently in the beta testing phase, and experts envisioned security as the biggest challenge for any IVR-based solution. The ease of use could be another biggest hurdle to overcome as most feature phone users’ usage behavior is restricted to dialing a phone number.

If successful, the voice-based payment solution can gain mass popularity as – besides feature phone users – a sizeable number of entry-level smartphone users are not acquainted with the functionality of apps.

Besides NPCI’s IVR-based internet-free payment solution, few other such experiments are being carried out to onboard feature phone users with digital payment platforms.

However, on one side, when Reliance Jio is all set to upgrade feature phone users to smartphones with its upcoming JioPhone Next, the viability and scalability of feature phone solutions are debatable.


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