HDFC Bank is going to spread out its fresh digital launches over the next few quarters, now that the regulatory embargo on them has been lifted, Parag Rao, head – payments business and IT, at the bank, told Shritama Bose. Some parts of the payments ecosystem are not yet ready to go live with Aadhaar OTP-based on-boarding for UPI. A launch will be ideal only when 90-95% of the system is prepared, Rao added. Edited excerpts:

When will you launch the fully digital challenger bank?
Right now we are working on an on-the-fly mobile-only credit card, which will also be serviced completely on the phone and will involve no physical touch. This should be a precursor to many such zero-touch mobile-ready completely DIY products we are launching in the marketplace, but we’ll start with credit cards as the priority. We are still studying the marketplace to see in what shape and form a digital bank can be introduced to customers in the Indian marketplace. Individual products will be launched. As and when we believe the marketplace is ready for the right kind of product, we’ll have to wrap all these together under the envelope and wrapper of a bank. We want to go to the market at the right time.

Anything for your merchant customers?
We have already done a soft launch for our digital merchant app called SmartHub Vyapar. This is targeted at medium and small merchants. For the larger merchants, we’ll also use the SmartHub Vyapar app clubbed with a POS machine because that’s the kind of requirement a larger merchant would have. We are working with global leader Adobe to create a very intrinsic and fungible customer experience layer to onboard a lot of our products which are instant and digital. We’ve rolled it out for select products for our existing customers. We are expanding the range to ensure we cover all our products for our internal customers and when we go to the market we’ll go with the enhancement layer for new-to-bank customers.We are also focusing on refurbishing and revamping our platform for SMEs. The one we have today involves the conventional way of the physical RM approaching the customer and taking care of his various banking needs. The web interface and the app interaction will be a completely digital platform where a bulk of the things an SME would want from his service provider are digital and DIY. This will help us to reach out to many more SMEs.

We are already a market leader in the SME space and this will help us service our existing customers better and expand to many more territories.

You recouped some of your credit card market share after the lifting of the issuance ban, but since December the trend has been reversed.
There is a phenomenon we constantly keep on doing on our portfolio, which is weeding out inactive cards every quarter. Unlike many other players, we don’t keep bloating our numbers. The number that is published is a net figure, not a gross figure. Our acquisition plans continue to go up. We’ve exceeded the pre-embargo run rates and going forward, we plan to run that up even further.

The deadline for launching Aadhaar OTP-based UPI onboarding is set to be extended. What is the level of preparedness in the system?
Well, the fact that it’s being extended itself says that the ecosystem is not ready yet completely. UPI is a very interoperable, deeply interlinked ecosystem between payment service providers (PSPs), remitter banks and the issuing bank. Even if one leg of it is not ready, then the entire customer experience of a transaction is extremely poor. So while it is a strength of the ecosystem, when you make changes or new additions, it requires the entire ecosystem to be at least 90-95% ready for transactions to go through smoothly. There are parts of the system that will take some more time. Taking cognizance of that, some of these deadlines have been pushed back a little.