National Payments Corporation of India (NPCI) has reported a profit of INR 773.4 crore ($102.5 million) for the fiscal year 2021-2022, an 84.4% increase from the previous year. The company’s operating revenue grew by 45.3% to INR 1,629.5 crore, driven primarily by its payment services, which contributed 96.1% of the operating revenue. NPCI’s expenditure also increased, with advertising and promotion costs growing more than threefold to INR 210.33 crore, and employee benefit costs rising by 16.3% to INR 197.53 crore. The company’s return on capital employed (ROCE) and EBITDA margin were 25.86% and 63.43%, respectively.
Backed by a cohort of 66 shareholders including public sector banks, private banks and other players in the financial services sector, NPCI certainly delivers as an investment to its stakeholders. However, its performance as a partner that oversees some of the biggest innovations in the sector is up for debate, considering how ‘stingy’ it has been when it comes to allowing profits to be made on these innovations. All the more reason to track and ensure that the ‘ecosystem’ behind NPCI and the tremendous influence it has does not stifle potential innovators or innovations elsewhere.
The article highlights that while NPCI has been successful in delivering profits to its shareholders, there is a concern about how it oversees and allows profits to be made on innovations in the sector. The author suggests that NPCI’s influence should not stifle potential innovators or innovations elsewhere. This is an important consideration given NPCI’s dominant position in the digital payments space in India, and its role in driving innovation in the sector. It will be important for NPCI to strike a balance between delivering value to its stakeholders and fostering innovation in the payments ecosystem.