India’s payments landscape has experienced significant transformation over the last decade, as card networks increasingly vie for everyday transactions. Traditionally, debit and credit cards backed by global networks like Visa and Mastercard dominated non-cash payments, supported by point-of-sale (PoS) infrastructure and bank-issued cards. Accelerated growth has accompanied the rise in financial inclusion, e-commerce adoption, and the popularity of contactless and NFC payments, particularly in urban areas.
The turning point arrived with the National Payments Corporation of India’s launch of the Unified Payments Interface (UPI). UPI introduced instant, interoperable bank-to-bank transfers via mobile apps, removing the need for cards in numerous scenarios. Its QR-based acceptance model significantly reduced merchant onboarding costs compared to PoS terminals, facilitating rapid adoption among small merchants, kirana stores, and peer-to-peer transactions.
In an interview with ETCIO, Rishi Chhabra, Country Manager for Visa in India, discussed various facets of the evolving payments ecosystem, including the impact of digitalization, tokenization, and emerging technologies.
Excerpts from the conversation:
How do you see the payments landscape and ecosystem evolving in India?
“Payments will keep evolving as consumer needs and expectations change. The expectations of businesses are also shifting. I believe that payments rely on three key pillars: trust, scale, and ease of use. Consistently delivering on all three is essential to exceed expectations. Trust is built over time, scale takes time to develop, and ease of use is often the most challenging because its definition evolves. ‘Ease of use’ can vary from a restaurant to a supermarket, or during a time-sensitive online sale. Consumers demand speed, quality, and security—rightly so, as they are dealing with money. The challenge lies in meeting these expectations daily.”
Digital payments have seen rapid growth in India. What are your thoughts on this trend?
“The growth is remarkable, yet a vital reality persists: nearly 50% of transactions in India remain cash-based. This highlights the vast potential still available. I advocate for expanding the ecosystem rather than competing for market share. This market isn’t a zero-sum game. Initiatives like demonetization, UPI, and mobile payments have broadened the ecosystem, helping millions access formal finance for the first time.”
Has UPI taken market share from payment cards?
“I do not view it that way. UPI has fundamentally altered consumer behavior, demonstrating that payments can occur instantly via mobile phone. This has raised expectations throughout the ecosystem, which is a positive development. In India, there are approximately 55 to 60 million unique credit card holders in a nationwide population exceeding one billion. The potential for growth is significant. This situation isn’t about UPI versus cards; they coexist, each serving distinct purposes.”
Is pride of ownership still relevant with credit cards?
“Pride of ownership persists with cards—both in India and globally. Cards serve as more than just payment tools; they are tied to unique experiences. Some consumers prefer a general-purpose card for rewards, others may opt for an Amazon card due to frequent shopping there, and some seek travel benefits. This emotional connection is absent in QR codes. Therefore, both formats can exist together.”
Tokenization has gained prominence in digital payments. What role does tokenization play in the ecosystem?
“Tokenization ensures that actual card numbers are neither stored nor transmitted. Instead, a cryptographic token is utilized. In India, tokenization began around four to five years ago, in close collaboration with regulators. Presently, Visa boasts over 15 billion tokenized credentials globally, with around 500 million in India. Each merchant receives a unique token for the same card. Even if one token is compromised, it cannot be used elsewhere. Consumers typically don’t notice this process, but that is the point—it operates seamlessly.”
How are modern technologies like cloud and AI reshaping the payments landscape?
“Legacy systems can take substantial time—months or quarters—to introduce new products. In contrast, cloud-native platforms can achieve this in weeks. This is one reason Visa acquired Pismo, a cloud-native card issuance and management platform that supports debit, credit, and prepaid cards on a single stack while integrating with core banking systems. This allows banks to innovate rapidly without juggling multiple processors.”
What do you envision for the future of payments, especially with the rise of agentic AI?
“We are transitioning from AI serving as an assistive tool to becoming an agentic force—agent-led, human-controlled commerce. Imagine a trusted AI agent that knows you desire a macchiato at 4 PM from a specific café. It would place the order, initiate payment using tokenization and passkeys, and you would approve via biometric verification. For this concept to succeed, robust trust frameworks, authentication processes, and dispute resolutions must be established. This represents the direction we are heading towards—facilitating agent-led, human-controlled commerce.”
