NTT Data Payment Services India is expanding into merchant financing and cross-border payments. The company aims to move beyond backend infrastructure by launching its Adaptis platform to offer credit lines to small businesses. This move addresses monetization challenges in the Indian market where zero merchant discount rates on UPI transactions currently limit traditional payment revenue.
NTT Data Payment Services India is shifting its strategy to capture more value from the Indian financial market. While the company has primarily provided backend payment infrastructure since entering the country in 2019, it is now preparing to offer merchant financing and cross-border transaction services. This move is designed to diversify its revenue streams in an environment where standard payment processing faces monetization pressure.
Strategic Expansion via Adaptis Platform
The company is introducing its Adaptis platform, which is already operational in several Southeast Asian markets including Thailand, Malaysia, and the Philippines. This system is intended to provide merchants with credit lines and loans based on their cash flow. To implement this lending strategy, NTT Data is actively looking for local partners that possess the required regulatory licenses for providing credit and non-bank financial services in India.
In addition to credit services, the platform aims to facilitate cross-border transactions by connecting India’s Unified Payments Interface (UPI) with international fast payment systems. This hub-based architecture is a central component of the company's effort to increase its relevance in India’s high-volume digital payments ecosystem.
Navigating Revenue Challenges
Expansion into new segments is a response to the current financial structure of India’s digital payments sector. The company has noted that the zero merchant discount rate (MDR) policy on UPI transactions makes traditional payment processing less profitable compared to other global markets where transaction fees serve as a primary revenue source. By moving into merchant financing, the company aims to create a more sustainable business model that does not rely solely on payment processing fees.
Leveraging Global Partnerships
NTT Data is positioning itself as a long-term player in the Indian market, contrasting its strategy with venture-backed firms that often prioritize rapid user acquisition over immediate profitability. The firm is leveraging its Japanese roots to build partnerships within the Indian financial sector. Discussions are currently underway with institutions such as Sumitomo Mitsui Banking Corp. (SMBC) to explore collaborative opportunities. The company believes its adherence to Japanese service and quality standards will provide a competitive advantage when working with other Japanese financial entities operating in India.
Investors and market participants may track the company's progress in securing local lending partners and obtaining necessary regulatory clearances. The success of this expansion will depend on the firm's ability to scale its credit solutions effectively while navigating the competitive landscape of India's fintech sector.