India’s digital payments industry continues to make the news this week, as the major policy move announced by the National Payments Corporation of India (NPCI) — 30% cap on the total volume of UPI transactions through third-party payment apps (TPAPs) — divided opinions among industry stakeholders. The debate was over whether the move is beneficial and about the fine print needed for its enforcement.
A clutch of stakeholders from India’s fintech industry feels that NPCI is likely to enforce the new norm by moderating the onboarding of new customers by TPAPs when these platforms approach the 30% market share threshold.
Reportedly, NPCI is planning to organise several consultations with stakeholders in the coming 40-45 days, where the enforcement of the 30% cap will be discussed.
The NPCI move to enforce a 30% cap on the market share of each of the TPAPs has been seen by many as a means to ensure that India’s digital payments ecosystem isn’t monopolised by a few big players, besides also ensuring that UPI’s digital payments infrastructure doesn’t suffer overload as it scales up.
Currently, Flipkart-owned PhonePe owns 42% market share in terms of the total volume of UPI transactions, followed by Google Pay at 41%. The remaining share is distributed amongst Mobikwik and Paytm, with smaller players yet to make a dent on the market.
This week, the Competition Commission of India (CCI) opened another antitrust case against global tech giant Google, for its digital payments app Google Pay. The competition watchdog had also issued a notice to Google back in May and is now looking to further investigate the matter.
The case alleges that Google unfairly promotes its own payments app through “prominent placement on the Play Store. The case also accuses Google of “imposing unfair terms” on users by requiring them to use the payments app.
Recently, a payments industry expert told Inc42 that the argument that NPCI’s 30% cap would be helpful in preventing monopolisation of the sector, is flawed. He said that a better way to prevent monopolisation is through New Umbrella Entity’s (NUEs), which are entities with an RBI license to set up, manage and operate a pan-India retail payments system.
Meanwhile, Tata Group and the State Bank of India (SBI) have shown interest in applying for an NUE license from RBI.
On November 12, payments industry veteran and chairman emeritus of the Payments Council of India (PCI), Navin Surya, announced that his newly set up company, So Hum Bharat Digital Payments, would apply for an NUE license. Surya’s company is backed by financial technology solutions provider Infibeam Avenues.
- Bengaluru-headquartered Indian foodtech unicorn Swiggy has initiated an ESOP liquidation program worth around $7-9 Mn (INR 51-66 Cr), to reward its employees as the food delivery business is making a recovery to pre-Covid levels.
Another Bengaluru-based Indian startup, social commerce platform Meesho has announced an ESOP buyback program worth around $5 Mn (INR 37 Cr), the company said in a press statement.
- PUBG Corporation, the South Korea-based parent of the popular battle royale video game PlayerUnknown’s Battlegrounds (PUBG), on Thursday (November 12), announced that it would launch ‘PUBG Mobile India’ in the country soon to specifically cater to the needs of Indian players. However, it did not share when it planned to release the title.
- Tech giant Apple recorded revenue of INR 13,756 Cr in India the fiscal year 2020 (FY20), a 29% year-on-year (YoY) jump from revenue of INR 10,674 Cr for FY19.
Apple’s net profit for FY20 stood at INR 926.2 crore in FY20 in India, a 267% growth from INR 262.27 Cr in the preceding fiscal.
- As India is discovering its knack for digital payments, the number of registered mobile money accounts in India has jumped 95x between 2014 and 2019. Mobile money is a technology that allows people to receive, store and spend money using a mobile phone.
- ByteDance is looking for ways to revoke the ban on its short video app TikTok. The China-based company is currently trying to loop in partner firms for legal, policy, advocacy and communication functions in India. The company is positive that the resolution with the US administration will come through the Walmart Oracle deal, under which these global tech giants will buy around 20% of TikTok’s global businesses.
From the funding and acquisitions corner, about $217 Mn was invested across 25 Indian startups this week
Among the movers and shakers this week, ShareChat appointed former Product Leader at Uber, Gaurav Mishra as SVP – Product.
Stay tuned for next week’s edition of News Roundup.