Thread by @sandeepssrin

#SundayMorningThoughts

My 2021 spyglass for Credit Cards in India:
Biggest challenge of 2020 for us @RedCarpetUp was - whom to approve.

Despite a 6 month loan moratorium + 3 mth supreme court lawsuit, we did 125% in issuance vs 2019, even after heavily constraining approval.

We consider our biggest success to stay firm on collections, without stepping into bad ethical territory - in the toughest moral hazard of the last 100 yrs.
We also launched our credit builder + BNPL-equivalent card. With our SME card waiting for regulatory approval.

Prediction for Regulatory unlock - we already have RBI approval for colending w/ direct assignment to unlock debt capital.
We have all SME credit cards being blessed as priority sector lending.

And have NPCI piggyback on PPI cards to cut out banks altogether.

RBI's Payment Infrastructure Development Fund will grow sharp teeth for cards to compete with UPI QR for dukaan-style txn - ties in with its blessing for INR 5k no-2FA card swipes.

And yes the holy grail - will HAVE to bless new CC licenses for NBFC, since SBI Cards went IPO

I do see VISA + MasterCard fight back big on UPI this year. Tokenisation is going to be key - will drive merchant acceptance using a dumb mobile app vs expensive hardware.
If they are brave enough..will kill the concept of a swipe. Just give out card numbers using a generated QR

I also predict new regulatory licenses for loan aggregators - LSP - given the sensitivity around China.

P.S. IMHO this will delay NBFC-AA "Plaid" launch

A little far-fetched, but possible - new securitization norms for credit cards, similar to ABS in the US.

NUE will happen. Ppl think it won't, but I think it's much more forward looking than any other country. And someone will launch a CBDC as a NUE.
IMHO card networks will also be forced to become NUE, but let's see - this is really an interoperability debate !