India's payments regulator is set to decide on Monday. Prevent the dominance of Walmart's PhonePe and Google. The country's fast-growing mobile payments market is a move that could change how its billion-strong population moves money around.
The decision centers on UPI, or Unified Payments Interface, a network backed by more than 50 retail banks that is changing the way Indians pay for everything from groceries to taxi rides. The platform processes more than 13 billion monthly payments, making it one of the world's largest digital payment networks. Also, it is the most popular way for Indians to transfer money online.
At issue is whether the National Payments Corporation of India, which reports to India's central bank, will enforce a regulation restricting companies. Not more than 30% of all UPI transactions..
discipline First 2020 was proposed.This will especially affect Walmart-owned PhoneP, which handles 47.8% of all UPI payments, and Google Pay, which processes 37.1%.
The uncertainty throws a wrench into PhonePe's plans to go public. startup Valued at $12 billion. Backed by Walmart, It will be one of India's most prominent tech IPOs. Sameer Nigam, co-founder and CEO of PhonePe, said in August that the startup may not go public unless there is “certainty on the regulatory side”.
“If you buy a share at Rs 100, if we have 48-49% market share, I am not sure when the price will fall to 30%,” said Nigam (pictured above). Fintech conference. “We're asking them (regulators) to address any of their concerns or if they can address a list of concerns.”
The issue also affects the growth prospects of many fintech startups trying to make deeper inroads into digital payments. If regulators impose limits on PhonePe and Google Pay's ability to roll out new users or check how many transactions they make. Many other startups stand to gain reason.
People briefed on the situation told TechCrunch that the regulator wants to delay enforcing the cap again or raise the limit to more than 40%. From January 2021 to 2023, as the agency struggles to implement. The deadline has since been pushed back several times to 2025. We have recently discussed the decision with several stakeholders.
Some people say that enforcing a limit on market share will affect the consumer experience.
The situation highlights India's efforts to balance market competition and technological innovation. UPI is Prime Minister Narendra Modi's cornerstone to digitize India's economy and reduce dependence on cash. The system allows instant transfers between bank accounts using simple identifiers such as phone numbers for more immediate access than traditional banking services.
The market share cap is Walmart; It will mark one of the most significant interventions in India's technology sector, which has attracted huge investments from global companies like Google and Meta. These companies see India as an important growth market with India's growing young digital population.