The Payments Pioneer

Fintech as a sector has brought out some incredible innovations over the last decade which have fundamentally changed the way we approach transactions, and no one has a better bird’s-eye view than Navin Gupta, Managing Director for South Asia and MENA region for Ripple Technologies. A financial services veteran, Navin has extensive experience in global transaction banking, payments and cash management, and strategy planning, following nearly two decades working for HSBC and Citigroup across the U.S., Hong Kong, Japan, Taiwan and India. He has also served as a board member of the National Payments Corporation of India (NPCI). Corporate Citizen chats with Gupta about his fascinating career journey, his experience with a then nascent NPCI, and why he feels digital is here to stay

"There is a lot of gig economy work done in India. People do freelance work from home on a project basis. This gig economy, which is the new informal economy, is growing"

Corporate Citizen: Take us through your career.

Naving Gupta : I went to grad school at Thunderbird in the US on a scholarship and then joined Citibank through their campus placement. I joined them in New York. I was working in Wall Street with Citigroup at that time and then I moved from New York to San Francisco, being the banker to technology companies on the West Coast such as Amazon, Google, EA and Qualcomm. In fact, in 2002, I went to Google for the first time along with my boss. An interesting thing happened when we met the CFO of Google. Google was receiving money from all around the globe, and they wanted us to help them with a cash management solution. The moment we exited the company campus, my boss looked at me and said, “Navin, you better not resign and join Google.”

I visited Google and Apple, and I just knew that there was something special about these companies. There is electricity, a sense of purpose. This is generally true about a number of Silicon Valley companies. This is also true about Ripple. Our purpose is very clear to us. Of course, the path to the particular goal may be topsy turvy and littered with a lot of ups and downs but it is very clear to everyone who works at Ripple what it is that we want to achieve.

CC: What followed your stint at Citigroup?

After being in San Francisco, I decided to move to Hong Kong with HSBC. I was with HSBC for 10 years, working for them in Hong Kong, Japan, Taiwan and India. While I was working with them in India, I was also on the board of the National Payments Corporation of India (NPCI). This was between 2011-14, and that time, unlike the NPCI that we see today, which supports multiple digital solutions for every Indian, it was a small company and it was still trying to find ways to digitise India. The Chairman was Mr Narayana Murthy, which was great because he could guide us through his early days of Infosys. He taught us that though NPCI was small, we could have aspirations to bring at least one digital solution to every Indian. Hence, despite our small size, we were able to punch much above our weight. Today, NPCI has created UPI, which makes our lives very easy every day. After finishing with NPCI, I again moved to Hong Kong with HSBC. After a while, I quit HSBC and started building my own company. For two years, I was an entrepreneur and I was building an ‘Uber for Trucks’ in India. Then I decided to shut that company down and I joined Ripple in 2017. I was their first employee in India and I opened their office in India. That’s my professional journey.

CC: You have worked in mature markets around the world. Do you believe India has been lagging behind the world when it comes to adopting a digital solution. Do you think demonetisation and now the pandemic has accelerated adoption?

I would answer this from two perspectives. The first being that we have absolutely been forced by market events into an adoption. Today, if you need to pay the sabziwala for vegetables, you have no choice to pay digitally as cash may be inconvenient for multiple reasons, whether it is demonetisation where you didn’t have cash in the pocket or Covid-19 where you don’t want the virus to spread. The second thing I would say is that for large consumption markets like the US, China, and India, there is a huge role for entrepreneurs to play. If you look at the US, eBay or PayPal or now Venmo, it has made very easy for digital payments to go back and forth. Similarly, Paytm, PhonePay and Google Pay are making it very easy to meet that need for consumers in India to quickly make payments when needed, using the UPI technology from NPCI which essentially lets you transfer money from point A to point B using just your phone number. This grease in the wheel is equally important along with a large consumer economy which has buyers and sellers who want to use these solutions.

"You can think of Ripple as the UPI for cross-border payments. If I want to send $100 to someone in India, I will be able to see the amount the person would receive in Rupees"

CC: Compared to many other sectors who have faced massive setbacks during this pandemic, do you believe the fintech sector and Ripple by extension have benefitted from the pandemic?

I will take a second to explain what Ripple does, UPI is a platform for domestic payments. You can think of Ripple as the UPI for cross-border payments. If I want to send $100 to someone in India, I will be able to see the amount the person would receive in Rupees. It is also able to do error verification. For example, if someone has accidentally given me the wrong account number, I would be able to verify the name and account number before making a transfer to ensure that money is going into the right account.

We are a digital native company. We were around eight or nine years ago, so we are primarily digital. What Covid-19 has done is it has changed the consumer behaviour. The consumer has made a dramatic shift to digital. Our end customers are either senders or receivers of remittances. Earlier, if people wanted to send money back home, they would go to a particular outlet overseas and give them cash and then their relative would go to an outlet in India and collect it. Due to the pandemic, this became inconvenient to do. People began to use bank accounts or apps to do this transaction. With both the sender and receiver migrating to digital, automatically companies like Ripple benefits hugely as most of our customers are digital only customers or digital-first banks who are using the Ripple platform to transfer money. Ripple has benefitted from the transition to digital the same way NPCI has.

CC: Ripple uses the XRP cryptocurrency which has several advantages but it is still met with some resistance by financial institutions. Do you think these concerns are valid?

The current solutions we offer in India do not use any digital asset or cryptocurrency. It uses the blockchain platform but it is fully compliant with the letter and spirit of the regulations that are prevalent in the country where we are able to transfer money between people instantly, error-free and transparently without using any cryptocurrency. XRP gets used in a solution called On-Demand Liquidity, which is available in the Philippines and Mexico because they already have the regulatory clarity for exchanges between XRP to their local currency. Currently, in the traditional system, if someone in the UK wants to send money to India, the GBP gets converted into Dollar and the US Dollar is then converted into the Rupee. In Philippines and Mexico, GBP will get converted to XRP, and XRP will get converted to Philippines Peso and the transaction will be completed. In this case, because this happens 24/7, 365 days a year between multiple exchanges around the world, the transactions can sometimes be 60% cheaper. The average cost of remittances is 7%. For example, if your relative sends you $100, you will only receive $93. The World Bank, the IMF and all countries want to reduce the cost of remittances. In fact, it is the stated goal of the UN. One of the reasons the cost of remittances is very high is because of the high liquidity costs. Our solution offered in the Philippines and Mexico removes this cost. Similar to the internet or any such technology, we need to curb bad use cases, but good use cases need to be encouraged. This is the same for blockchain. We need to ensure this technology is not misused for buying drugs or terrorism funding, but we must encourage positive use cases such as reducing the cost of remittances.

CC: The World Bank has projected that Remittances may drop by 23% this year. Is this a phenomenon you have noticed on Ripple?

Almost 100% of transactions on Ripple are remittances. Remittances are a reflection of the real economy. What we are seeing is that the value of remittances is going down but the volume is not going down by the same percentage. People are buying less from each other. People are sending less money overseas, but they are still sending money nonetheless. Also, since there has been a significant move from physical to digital, Ripple is not impacted as most of our customers are digital and the digital market share is increasing in the overall size of the market. So we are growing at a very healthy rate.

CC: South Asian countries including India are seen as emerging markets. What is the potential you see for Ripple in the next few years?

We see huge potential in these markets. Consumption here is rising, they have a young population and their GDPs are growing (barring the last quarter). Most of the time, emerging markets tend to be exporters of either talent or goods to mature markets. If you look at countries like China, Thailand or India, they are exporters of goods to mature markets. Developed countries tend to be the buyers of goods and services. Talent from countries like India will move there, and they will send remittances back home, which can be used by these countries to rise further. There is a lot of gig economy work done in India. People do freelance work from home on a project basis. This gig economy, which is the new informal economy, is growing. In my mind, these people are creating new business models. You can now start a new company with zero employees on your payroll, hiring freelancers from all over the world. This gig economy will need a global payments system, which is being created by Ripple.

"What Covid-19 has done is it has changed the consumer behaviour. The consumer has made a dramatic shift to digital"

CC: Tell us about some initiatives in your career that you are very proud of.

When we launched Immediate Payment Service (IMPS) at NPCI, there were very few banks which were part of this. At that time, you had to have an Mobile Money Identifier (MMID), which was issued by the bank. Initially, we struggled because even though it was a great product, we weren’t sure how immediate payments would work because there was no parallel in any other market around the world. We launched it purely because we envisioned that this is the way payment systems were headed in the future and that this solution would be right for India. One of the highlights of my career was how we were able to take IMPS from its infancy and turn it into a successful product. Now NPCI is taking IMPS’ technology overseas and other countries will be using it as well.

CC: How has the pandemic changed the way you work?

Earlier, we used to believe meeting face to face was very important to create trust. What we have realised post-Covid is that these concerns were unfounded. We are now able to build trust and reach the same level of comfort even without meeting them through the use of technology. Two years ago, I wouldn’t have believed this was possible. Digital was the sidekick to Physical but going forward, Physical will now be a sidekick to Digital. I believe this change will be permanent

CC: Do you think this Covid-19 pandemic has blurred the work-life balance?

Earlier, there used to be some physical demarcation between home and office. When you went into the office, just the change of environment would help people switch off from what was happening in their personal life and focus of the work-life, which created a boundary between the two. Now, as we are at home all the time, it becomes difficult for people to strike a division between the two. Also, sometimes the environment at home may not be ideal, and that leads to stress coming into your work-life and vice versa. It’s very important at this time to stay mentally healthy. It will require some practices such as going out to play a game or meditation or several other ways though which people can unwind and help maintain the demarcation of professional and personal life.

CC: You are also an Art of Living teacher. Tell us about your spiritual side.

I don’t differentiate between a personal side and a professional side. At Ripple, we are serving our customers. In return, the customer rewards the company. In the Vedic tradition, Dharma is doing the right thing for people, which is what we try to do at Ripple. If we charge Rs.1, we ensure that we deliver the value of at least Rs.5. It’s exactly the same in personal life as well. For me, to be available and be useful to my family and community and myself, and be able to deliver value to them is essential.

CC: What’s your philosophy of life?

Since I was young, it was very clear in my mind that you should never fool yourself. I believed I am not in this world to impress anyone or fool myself. This what I have maintained throughout my life.