BENGLAURU : Digital payments firms will be forced to look at speeding up their revenue plans as compliance expectations from the government and the Reserve Bank of India (RBI) may increase operating and compliance costs. The finance ministry’s decision to slash merchant discount rates (MDR) to zero for UPI and RuPay transactions, starting January 2020, further impacted revenues of payment firms leading to heavy lobbying for its reversal. “With checks in place, overall compliance costs will go up significantly with mid-scale fintechs and banks expecting capital expenditure to almost double and in some cases triple. Hathi added that the positive of increasing compliance costs will be innovation around cybersecurity, with avenues of growth opening for tech-based intervention to curb frauds, and reduce costs. Due to this, costs will go up requiring regulated entities to manage, especially when digital payments are already a wafer thin margin business.

Source: Mint February 24, 2021 23:47 UTC