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India’s payments regulator is expected to make a decision on Monday Curbing the dominance of Walmart’s PhonePe and Google a move that could transform the way its billion-plus people transfer money in the country’s fast-growing mobile payments market.
Decision hub UPI, or Unified Payments Interface, is a network powered by more than 50 retail banks that is changing the way Indians pay for everything from groceries to cab rides. The platform processes more than 13 billion transactions every month, making it one of the largest digital payment networks in the world. It is also by far the most popular way for Indians to transact online.
At issue is whether the National Payments Corporation of India, which reports to India’s central bank, should impose a rule restricting companies. it does not handle more than 30% of all UPI transactions.
Rule, first Offered in 2020will especially affect Walmart-owned PhonePe, which handles 47.8% of all UPI payments, and Google Pay, which processes 37.1%.
The uncertainty has hit PhonePe’s plans to go public. start, It is valued at 12 billion dollars and backed by Walmart, would be one of India’s most prominent technology IPOs. PhonePe co-founder and CEO Sameer Nigam said in August that the startup could not go public “if there is uncertainty on the regulatory side.”
“If you’re buying a share at Rs 100 and you’re valuing it assuming we have a 48-49% market share, then there’s uncertainty as to whether and by when it will fall to 30%,” says Nigam (above in the picture) said. fintech conference. “We’re asking them (the regulator) if they can at least find another way to address their concerns or let us know what their list of concerns is.”
The issue also affects the growth potential of numerous fintech startups trying to make deeper inroads into digital payments. If the regulator puts limits on the ability of PhonePe and Google Pay to connect new users or controls the number of transactions they process, many other startups will gain ground.
The regulator is likely to delay implementing the cap again, or may increase the cap by more than 40%, people familiar with the situation told TechCrunch. The agency pushed back the deadline several times, from January 2021 to 2023 and then to 2025, as it struggled with enforcement. As last week, he held talks with many interested parties regarding the decision.
Some people said that imposing a market share cap would affect the consumer experience.
The situation highlights India’s efforts to balance technological innovation with market competition. UPI has been a cornerstone of Prime Minister Narendra Modi’s push to digitize India’s economy and reduce its reliance on cash. The system allows instant transfers between bank accounts using simple identifiers such as phone numbers, making it more accessible than traditional banking services.
The market share surge will mark one of India’s most significant forays into the technology sector, which has attracted major investments from global companies such as Walmart, Google and Meta. These companies see India as an important growth market with its young, increasingly digital population.
