India has as soon as once more pushed again a contentious plan to restrict main know-how firms’ management of the nation’s digital funds system, extending a regulatory uncertainty that has weighed on the sector for years.
The Nationwide Funds Company of India stated on Tuesday it could prolong the deadline for implementing a 30% cap on any particular person app’s share of transactions on the Unified Funds Interface, or UPI, the nation’s ubiquitous digital funds community, to December 31, 2026.
The choice offers short-term reduction to Walmart-backed PhonePe and Google Pay, which collectively deal with greater than 85% of transactions on UPI. The community, which processes over 13 billion transactions month-to-month, has turn into the spine of India’s digital economic system since its launch eight years in the past.
The regulator, which operates underneath the supervision of India’s central financial institution and is backed by greater than 50 retail banks, has struggled to find ways to implement the market share restrictions with out disrupting service for lots of of tens of millions of Indians who depend on these cost apps each day.
On Tuesday, India additionally lifted restrictions on WhatsApp’s mobile payments service, letting the Meta-owned prompt messaging app roll out WhatsApp Pay to all its 500 million-plus customers within the South Asian market.
All through this 12 months, officers held extensive discussions with industry leaders about methods to implement the caps, however discovered no possible resolution that wouldn’t danger disrupting the patron expertise, based on individuals conversant in the discussions.
Earlier this 12 months an Indian parliamentary panel urged the federal government to support the growth of domestic fintech players that may present options to PhonePe and Google Pay.
The market share limits have been first proposed in 2020, with an preliminary deadline that was later pushed to 2025. Tuesday’s determination marks one other delay in India’s efforts to examine the rising energy of world know-how giants in its booming digital economic system.
For PhonePe, which controls almost half of India’s digital funds market, the extension offers essential readability because it weighs plans for an preliminary public providing. The corporate’s prime govt had beforehand cited the regulatory uncertainty round market share caps as a key impediment to their IPO timeline.
The UPI community, which facilitates interoperability amongst completely different cost apps and banks, has turn into the most well-liked method Indians transact on-line, used for the whole lot from avenue vendor funds to taxi fares.
