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India has as soon as once more pushed again a contentious plan to restrict main expertise corporations’ 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 will lengthen 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 supplies 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 change into the spine of India’s digital financial system since its launch eight years in the past.
The regulator, which operates underneath the supervision of India’s central financial institution and is backed by greater than 50 retail banks, has struggled to seek out methods to implement the market share restrictions with out disrupting service for a whole lot of hundreds of thousands of Indians who depend on these fee apps each day.
On Tuesday, India additionally lifted restrictions on WhatsApp’s cellular funds 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 12 months, officers held in depth discussions with trade leaders about methods to implement the caps, however discovered no possible resolution that wouldn’t threat disrupting the patron expertise, in response to individuals aware of the discussions.
Earlier this 12 months an Indian parliamentary panel urged the federal government to assist the expansion of home fintech gamers that may present alternate options to PhonePe and Google Pay.
The market share limits have been first proposed in 2020, with an preliminary deadline that was later pushed to 2025. Tuesday’s choice marks one other delay in India’s efforts to verify the rising energy of worldwide expertise giants in its booming digital financial system.
For PhonePe, which controls practically half of India’s digital funds market, the extension supplies 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 completely different fee apps and banks, has change into the most well-liked approach Indians transact on-line, used for every part from road vendor funds to taxi fares.
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