The National Payments Corporation of India (NPCI), an umbrella organization for all retail payments in India, is planning on using blockchain solutions to strengthen digital payments. The payments network said in a notification, “NPCI intends to develop a resilient, real time and highly scalable blockchain solution. It is proposed to develop this solution using an open source technology/ framework/solution.”
NPCI has seemingly floated an Express of Interest (EOI) to enable interested bidders to put forward their competence for developing blockchain in the payment domain.
Blockhain is a system in which a record of transactions made in bitcoin or another cryptocurrency are maintained across several computers that are linked in a peer-to-peer network. Acting like a digital ledger, it keeps records of all transactions in an encrypted database. In case of online transactions, it allows users to send, receive and manage their accounts directly without the assistance of a third party.
By implementing the distributed ledger technology, NPCI wants to further strengthen digital payments, which have seen an exponential growth in recent times. Globally, the blockchain technology is expected to grow to $2.3 billion by 2021 as per Statista. PwC believes that India would emerge as one of the global blockchain leaders by 2023, while 6Wresearch projected the country’s blockchain technology market growth at 58% CAGR during 2018-24.
According to the market research company, the market would be highly dependent on increasing growth of digital payment solution through several intermediaries including digital wallets and Unified Payment Interface (UPI); digital payment solution market is projected to grow around 10 times and cross $500 billion by 2020 as compared to around $50 billion in 2017. This would give the desired push for the integration of blockchain technology for much secured transactions.
Babu Munagala, Founder and CEO, Zebi Data India said, “Blockchain technology is bound to register substantial growth over the coming years. Currently, consumer awareness for this particular technology is at a very niche stage. However, with surging growth of blockchain integration in several verticals, majorly driven by government and enterprise segment, the market is projected to register considerable growth over the next two to three years.”
Anuj Mehrotra, Senior Research Analyst, Research and Consulting, 6Wresearch, added, “The banking sector has already initiated plans to evaluate the adoption of blockchain solution in the present banking ecosystem to avoid fraudulent activities and scams. For instance, in Feb 2018, State Bank of India (SBI) initiated its exploration in the adoption of blockchain technology. Additionally, the financial application vertical is anticipated to record higher growth rate and cross 58% revenue share by 2024.”
NPCI was set up with the guidance and support of the Reserve Bank of India and the Indian Banks Association (IBA). 56 banks are currently its shareholders. It developed UPI and provides services like cheque clearance and facilitates digital payments.
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