Global tech giant Google on Friday criticised India’s move to cap the share of transactions some companies within the country’s digital payments space can account for, saying it would hinder the nation’s burgeoning digital payments economy.
Google’s criticism came after India’s flagship payments processor the National Payments Corp of India (NPCI) on Thursday said third-party payments apps, from January 1, will not be allowed to process more than 30 percent of the total volume of transactions on state-backed United Payments Interface (UPI) framework, which facilitates seamless peer-to-peer money transfers.
The move will likely stymie the growth of payments services offered by Facebook, Alphabet’s Google and Walmart, while boosting the likes of Reliance’s Jio Payments Bank and SoftBank-backed Paytm, which are armed with bank permits.
More than 2.07 billion UPI transactions were processed in October, according to NPCI, with Walmart’s PhonePe accounting for just over 40 percent of those transactions. Google Pay was a close second, with rivals like Paytm and dozens of others splitting the remaining 20% share.
Companies such as PhonePe and Google, which currently exceed NPCI’s stipulated cap, will get two years to comply with the new rules.
“This announcement has come as a surprise and has implications for hundreds of millions of users who use UPI for their daily payments and could impact the further adoption of UPI and the end goal of financial inclusion,” Sajith Sivanandan, Business Head at Google Pay, India, said in a statement.