Indian parliamentary panel red-flags PhonePe and Google Pay cornering 83% of India’s UPI funds amid Paytm clampdown

An Indian parliamentary panel has urged the federal government to help the expansion of home fintech gamers that may present options to the Walmart-backed PhonePe and Google Pay apps that presently command greater than 83% of the nation’s fast-growing digital funds market.

The 58-page report, which features a sequence of suggestions, comes at a time when Paytm, one other main funds agency within the nation, is reeling from a clampdown on its funds financial institution enterprise.

The Reserve Financial institution of India’s directive last week all however asks Paytm to stop operations of Paytm Funds Financial institution, which processes a lot of the transactions for the monetary companies agency. The disruption at Paytm will seemingly trigger the fee app’s market share in UPI to fall additional to rivals PhonePe and Google Pay, trade executives cautioned.

PhonePe commanded 46.91% of the UPI market share by quantity in the course of the interval of October to November 2023, the parliamentary committee on communications and IT wrote in its report. Google Pay held a market share of 36.39% throughout the identical interval, the report stated.

The market share by quantity of indigenous BHIM UPI was solely 0.22%, the report stated. PhonePe and Google Pay seemingly possess a big market share of UPI by transaction worth.

The Nationwide Funds Company of India, a particular unit of the Indian central financial institution RBI, has beforehand expressed similar concerns concerning the clear duopoly within the cell funds market within the South Asian market. It had earlier proposed imposing a verify available on the market share for gamers, making certain that no single participant shall course of greater than 30% of the UPI transactions in a month.

The NPCI, which oversees UPI funds community, in late 2022 extended the deadline for the brand new verify to finish of 2024. Google Pay and PhonePe assumed lower than 80% market share on the time when the NPCI initially proposed a verify in 2020.

“As India, focusing on ‘Make in India’ in other sectors, the Committee are of the opinion that local entities are to be promoted in the fintech sector,” the report added.