A
Parliamentary panel report
has flagged the large market share of
foreign-owned fintech apps
in the Indian market. The Parliamentary standing committee on communications and information technology has flagged dominant presence of apps such as Walmart-owned
PhonePe
and Google-owned
Google Pay
in the Unified Payments Interface (UPI) segment. The standing committee has recommended the government to promote local apps.
“The committee notes that fintech companies, apps and platforms such as PhonePe and Google Pay owned by foreign entities dominate the Indian fintech sector,” the house panel said in a report tabled in Parliament.
The UPI market share was 36.39% for Google Pay and 46.91 for PhonePe in terms of transaction volume in October-November 2023, it said.
The issue of concentration of the UPI market share has been taken up by the National Payments Corporation of India (NPCI), which has proposed imposing a 30% ceiling on UPI volume share for apps from next year.
Why report batting for made in India apps
The Parliamentary committee noted that “regulation of Indian fintech apps would be more feasible” for the Reserve Bank of India and NPCI compared to foreign entities that are present in multiple countries and hence may be governed by multiple jurisdictions. It said that several fintech companies were also being used for money laundering.
“In this context, the committee recommends that there should be focus on promotion of local Indian players in the fintech universe. Indigenously developed BHIM UPI is a good example of it, however its share in the UPI market is very low,” said the report.
As India is focusing on ‘Make in India’, the committee’s view is that local entities should be promoted in the fintech sector as well, the report added.
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