Penetration of credit card spends is growing across categories and geographies. And Unified Payment Interface (UPI), although seen as a competition, will soon become an enabler, believes Shailendra Singh, CEO and managing director of BOB Financial Solutions, in an interview with MintGenie.
He also sheds light on utility of digital wallets and rapidly evolving methods of making credit card transactions such as tap-n-pay and Google Pay.
According to him, the biggest disruptor will be the linkage of credit cards to UPI. He also explains about fraud detection transaction monitoring algorithm. He also shares a few tips to prevent occurrence of credit card related frauds.
While sharing his thoughts on the fintech ecosystem in India, he asserts that scale and spread of digital payments increased during the pandemic.
Can you tell us about the acceptability of Bank of Baroda's credit cards among retail customers?
Bank of Baroda (BoB) Credit Card is among the most preferred Credit Cards among retail customers today. The acceptability for our credit cards has increased significantly over the last few years, as BOB Financial Solutions Limited (BFSL), has continued to invest in people, processes, and technology.
We offer credit cards that are at par with the best in industry and are offered to a wide spectrum of retail customers, beyond the obvious segments of multi-carded residents of metros and mini-metros.
BFSL has ensured that it offers credit cards with features and benefits that are relevant to customers at a particular stage of life or based on specific spend needs.
With growing dependence on UPI and mobile wallet services, do you think the business of credit cards has suffered or is likely to suffer in the near future?
The growth in credit card spends indicates consumer confidence both in the Indian economy (post-pandemic) and in digital transactions.
The dominance of e-commerce transactions and penetration of credit card spends across categories and geographies bodes well for the immediate and medium term. UPI, mostly seen as competition, especially for small ticket purchases, will soon become an enabler, as more issuers enable RuPay Credit Cards on their UPI. Hopefully, RBI also allows other networks to ride the UPI rails for Credit Card transactions.
While Digital Wallets may have been a simpler method of making payments the industry is evolving rapidly with newer methods of making credit card transactions like Tap-n-Pay and Google Pay.
The biggest disruptor though will be the linkage of Credit Cards (CC) to UPI. While it may impact the form factor, the usage of Credit Cards will only increase, and maybe at the cost of Digital Wallets as the issues related to loading charges and end use not being known, will not apply to CC-UPI transactions.
Oftentimes, customers rue frauds committed on their credit card accounts. There have been instances of people losing a lot of money for no fault of theirs. What data security and fraud prevention measures does the Bank of Baroda have to prevent such cases?
This is where BoB Credit cards have a distinct advantage over many of the other products in the market. The trusted and reliable brand of Bank of Baroda assures the customers that their interests will never get compromised even in the unlikely scenario of any loss of money on their card.
Apart from the regulatory validations on 2FA, we have also deployed Falcon, a state-of-the-art fraud detection transaction monitoring algorithm, which monitors transactions in real-time and alerts us of any transactions that are uncharacteristic of customer past behaviour. In addition, we have data security protocols including cloud server management to ensure that customer data confidentiality does not get breached at all.
Would you like to give any advice to credit card customers regarding the usage of cards to ensure that they do not fall victim to any fraud?
It is said that there is no such thing as over-caution. Some of the suggested advices to avoid fraud transactions are:
• Verify the antecedents of any person who calls you a representative of any Bank.
• Never ever share any OTP with anyone over the phone or download any non-trusted application on your desktop or mobile devices since these are all trained to scrape private data from your devices.
• Do not hand over your mobile devices to strangers on the pretext of helping them make calls or check any other app.
• Never save your card details on any site and always prefer to purchase online from apps or portals that are trusted or secured.
Fraudsters are trying to institutionalize this industry, and it would only take the collective efforts of all vigilant citizens to help Banks and Financial institutions combat their nefarious intentions.
What do you think about the fintech ecosystem in India with regard to consumers' dependence on credit cards and digital payment system?
Fintechs have been an integral part and key reason behind the rapid adoption of digital payments in India. We all know the names of large fintech players who disrupted the digital payments space, mostly with the help of Unified Payments Interface (UPI). The demonetization exercise in 2016 added momentum to this adoption, especially on the acceptance side.
The scale and spread of digital payments came as a Godsend during the pandemic, as a digital payments and acceptance infrastructure was already in place for no/low touch interactions.
Customers using Credit Cards also found newer reasons and avenues to use their Credit Cards, forced in part by the pandemic, and were exposed to the constantly evolving and improving customer experience, facilitated by the fintech. Today, as the fintech system matures, both existing and new players are working on newer business cases that will further improve the customer experience during digital transactions.
While Buy Now Pay Later (BNPL) and Credit Card As A Service (CCAAS) are some of the buzzwords, linkage of Credit Cards (RuPay, to begin with) with UPI is the next big thing in the digital payments space, which is seeing a lot of action in the fintech ecosystem. Customer experience is poised to get another makeover, and customers using any mode of digital payments including Credit Cards, are set to gain the most.
What views do you have on the Budget 2023 from the perspective of a credit card company's leader?
The budget provides a huge fillip towards economic growth. It has balanced the demands of the rural as well as urban population. The budget has allocated additional funds towards various lending programs which will have a direct impact on the overall credit landscape, further enabling the country to grow.
The credit card industry is very optimistic about the future growth with the impetus given towards digitisation and the formalisation of the economy.
The Amrit kaal Budget will help the industry underwrite better and accordingly provide sharp risk-based pricing which ultimately benefits the customer.
The formalisation also helps more customers towards the formal banking channels, and they are in turn benefitted from the ability to borrow through formal channels.