Google has criticized India’s move to cap the share of payments of few firms inside the country’s digital transactions space can account for, saying it can delay India’s growing digital transactions economy.
Google’s criticism arrived after the country’s flagship transactions processor the NPCI has said 3rd-party payment applications, from 1st January 2021, will not be permitted to process more than 30% of the total volume of payments on state-backed UPI framework, which enables seamless peer-to-peer money transfers.
The move will probably impasse the growth of transaction services provided by Facebook, Google, and Walmart while increasing the likes of Jio Payments Bank and Paytm, which are armed with bank permits.
More than 2.07 billion UPI payments were processed in October, as per NPCI, with PhonePe accounting for just over 40% of those payments. Gpay was a close second, with rivals such as competitors Paytm and 12 others splitting the remaining 20 percent share.
Firms like PhonePe and Google, which presently exceeded NPCI’s stipulated cap, will get 2 years to obey the latest rules.
The business head at Gpay has said that this statement has come as astonishment and has insinuations for hundreds of millions of users who use UPI for their everyday transactions and could influence the additional adoption of UPI and the end target of financial inclusion.
The new caps don’t apply to Jio Payments Bank, or to Paytm, which have niche banking licenses and don’t fall into the 3rd-party applications category.
The senior executive from a digital payments firm has said that this will play to the whole theory of foreign players vs Indian, at some level. And also, why could the NPCI not say the cap was for every player, why only for the 3rd-party application providers?
The founder and the CEO of PhonePe said that the company is dedicated to ensuring that NPCI’s latest rule does not disturb services for its customers.
