Foreign-Owned Fintechs Under Scanner? MP Supriya Sule Calls PhonePe & Google Pay Ticking Bombs

Just a day after a Parliamentary panel raised concerns over the dominance of foreign-owned fintech apps, Nationalist Congress Party (NCP) Member of Parliament (MP) Supriya Sule has now called payment aggregators such as PhonePe and Google Pay ‘two ticking bombs.’ 

“Google Pay, Phone Pe are two sitting time bombs. BHIM app is hardly used while Google Pay and Phone Pe apps are used (widely). What is the government doing on digital or cashless economy?” Sule said.

Sule made the comments while participating in a discussion on ‘The White Paper on Indian economy’ in the Lok Sabha.

The NCP MP also raised concerns over the developments at Paytm Payments Bank, saying that whatever happened at the payments bank was alarming and almost like money laundering.

Earlier on Thursday, the Parliamentary Standing Committee on Communications and Information Technology, in a report, flagged the dominance of PhonePe and Google Pay in the digital payments space. The two players together accounted for more than 82% of total UPI transactions in 2023.

While PhonePe is owned by Walmart, Google Pay is backed by Alphabet. And even between the two, PhonePe accounts for a majority or almost half of the total transactions processed on the payments network.

The Committee also claimed that several fintech companies were being used to launder money and as such the Centre ought to focus on promotion of local Indian players in the fintech space.

Sule’s words have added more fuel to the ongoing debate within the corridors of the government to cap the market share for UPI apps. Recently, reports said that authorities were actively mulling the idea of a 30% ceiling on the market on UPI apps and that the crisis at Paytm Payments Bank had brought the proposal yet again under the central bank’s spotlight.

It is pertinent to note that the National Payments Corporation of India (NPCI) first floated the idea of imposing a 30% market cap limit for third-party app providers (TPAPs) back in late-2020. While the proposal had an original deadline of January 2021, the implementation of the norms was first deferred to December 2022 and then to December 2024.

Not just politicians, even top RBI officials have also, in the past, raised concerns over the dominance of PhonePe and Google Pay in the digital payments space. In 2022, RBI deputy governor T Rabi Sankar said that the central bank was looking at addressing the duopoly of PhonePe and Google Pay in the UPI space.