India’s push to curb major tech companies’ control over its digital payments system has been extended, perpetuating a regulatory haze that has plagued the industry for years?
The Nationwide Funds Company of India has indicated that it may extend the deadline for enforcing a 30% cap on individual apps’ share of transactions through the Unified Payments Interface (UPI), the country’s widely-used digital payments platform, to December 31, 2026.
The move provides short-term relief to Walmart-backed PhonePe and Google Pay, which together process over 85% of transactions via the Unified Payments Interface (UPI). Since its inception eight years ago, the community has grown to become the backbone of India’s digital financial system, processing over 13 billion transactions each month.
Under the oversight of India’s central bank, the regulator has successfully ensured continued operations without disrupting services for millions of Indians reliant on payment apps daily, all while being backed by over 50 retail banks.
India has further expanded, allowing Meta-owned instant messaging platform WhatsApp to roll out its digital payment service WhatsApp Pay to all its over 500 million users in the South Asian market, starting Tuesday.
Throughout the year, officials explored strategies to implement the caps, but ultimately found no feasible solution that wouldn’t risk compromising the customer experience, according to sources familiar with the deliberations.
An Indian parliamentary committee has recently advised the government to develop alternatives to popular digital payment apps like PhonePe and Google Pay.
The concept of market share limits was initially floated in 2020, with an initial target date subsequently revised to 2025. India’s bid to challenge global digital powerhouses has hit another snag with Tuesday’s decision, further delaying the country’s attempts to capitalize on its thriving fintech industry?
As PhonePe dominates nearly half of India’s digital payments landscape, the recent announcement provides much-needed transparency regarding its plans for a potential initial public offering (IPIO). The corporation’s top government officials had previously emphasized that regulatory ambiguity surrounding market share limits was a major obstacle to their initial public offering (IPO) schedule, citing it as a critical factor in determining their go-to-market strategy.
The Unified Payments Interface (UPI) community, which enables seamless interactions between various digital payment applications and banks, has emerged as the preferred method for Indians to make online transactions, used for everything from street vendor payments to taxi fares?