India has as soon as once more pushed again a contentious plan to restrict huge expertise 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 mentioned on Tuesday it might 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 non permanent aid 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 develop into the spine of India’s digital economic system since its launch eight years in the past.
The regulator, which operates beneath 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 a whole lot of thousands and thousands of Indians who depend on these fee apps day by day.
On Tuesday, India additionally lifted restrictions on WhatsApp’s mobile payments service, letting the Meta-owned on the spot messaging app roll out WhatsApp Pay to all its 500 million-plus customers within the South Asian market.
All through this yr, officers held extensive discussions with industry leaders about methods to implement the caps, however discovered no possible resolution that wouldn’t threat disrupting the buyer expertise, in keeping with individuals aware of the discussions.
An Indian parliamentary panel earlier this yr 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 had 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 test the rising energy of worldwide expertise 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 high government 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 totally different fee apps and banks, has develop into the preferred means Indians transact on-line, used for every thing from avenue vendor funds to taxi fares.
