State Government of Andhra Pradesh has signed an MOU with global payment network Visa, to develop Vishakhapatnam as India’s first less-cash city. This is part of the state government’s initiative to make the city as India’s FinTech Valley.
Announcing the move, Chandrababu Naidu, Chief Minister, State Government of Andhra Pradesh, said, “In my role as the Chair of the National Committee of Digital Payments, I also foresee this partnership as an opportunity to learn and develop insights on the approaches required to rapidly scale merchant acceptance and customer adoption of digital payments. I am hopeful that the learnings and success from this experience will provide a model that we could replicate across India in the medium–to–long term to steer India’s transition to a less–cash society.”
CM Naidu aims to make Vizag India’s Fintech Valley. To enable this, the fintech partner Visa will collaborate with the Government of Andhra Pradesh to focus on three pillars. The first move will be drive payment digitization across the city. Visa, together with its partners, will work with key city agencies in Vishakhapatnam like the Greater Vishakhapatnam Municipal Corporation (GVMC), Common Service Centres, Andhra Pradesh State Road Transport Corporation, and key merchant segments like auto rickshaw drivers and the agricultural markets, to help digitize payments.
“We are delighted to partner with Visa, the leading global payments network on this strategic endeavor. Through this project, we hope to see a threefold to fivefold increase on the 6,400 merchants currently accepting digital payments, and to increase customer adoption of electronic payments by 75% to 100%,” added Naidu. According to a study by Visa, electronic payment acceptance across Vishakhapatnam is better than most cities in India at a per capita penetration of Point Of Sale terminals of 273, relative to India’s median of 489. However, it has significant room to improve in achieving best–in–class per capita level of 20.
In fact, Visa will also drive major awareness campaigns to draw in underserved segments like women and small merchants. Talking about this, TR Ramachandran, Group Country Manager, Visa India & South Asia, said, “Visa welcomes the opportunity to partner with the State Government of Andhra Pradesh on this unique and strategic endeavour. We propose to undertake this initiative as a part of Visa’s global financial inclusion efforts that aim to provide 500 million underserved with a payment account by 2020.” The first aim is to educate the target audience on the benefits of adopting digital payments, and how best they can leverage this.
According to Ramachandran, Visa will also focus on working with state agencies to adopt commercial payment solutions that could see them realise significant cost savings. “For example, in 1997, the UK government rolled out its Government Procurement Card. The technology allowed government staff to purchase supplies, equipment, professional services, and materials with either a charge card or virtual account. This initiative involved more than 2,000 public sector organisations that were doing transactions in excess of EUR 7billion and benefitted from a savings of EUR 1 billion over time,” explained Ramachandran.
In the second focus area, Visa will help build the talent pool required in city organisations and in academia on emerging technologies like blockchain. Ramachandran says that for this initiative, the company will utilise its international reach to establish linkages with global experts in payments and FinTech. “We are committed to bringing Visa’s global expertise, innovations, and resources to make this endeavour a success. With the launch of BharatQR, a global first of its kind low-cost payment solution, we hope to rapidly scale up the number of small merchants accepting digital payments. In addition, we hope to implement innovative commercial payment solutions that will accrue significant benefits to the state,” he added.
The third focus area will be to provide support to FinTech start-ups by providing access to Visa’s APIs, providing subject matter expertise, and participating in boot camps and hackathons. The state government sees that as the initiative scales up it is likely to draw participation from various philanthropic, academic and not–for–profit institutions to leverage their expertise and networks. Naidu is expected to drive active support and collaboration with communities, city agencies and the state government to provide the on-ramp for this unique initiative designed to propel the goals of a “digital, less–cash India.