In April, Reserve Bank of India Governor Shri Shaktikanta Das announced plans to expand its retail central bank digital currency (CBDC) pilot beyond banks. Last month the central bank said payment providers would join the digital rupee pilot this quarter. Now Reuters reported that five payment providers have applied, citing sources. They are Google Pay, Walmart-backed PhonePe, Cred, Amazon Pay and Mobikwik.
PhonePe is India’s leading payments app, followed by GooglePay. Together they make up 85% of transactions and value for UPI, India’s successful instant payment solution, which processes almost 14 billion transactions monthly. Not mentioned among the digital rupee applicants is third ranked player PayTM, which has a 6% UPI market share. Cred is fourth, AmazonPay is sixth and Mobikwik is sixteenth, but the UPI figures drop off significantly beyond the big three.
If the CBDC follows UPI, then banks might end up playing second fiddle to the payment apps. Three banks rank in the top ten for UPI apps – Axis, ICICI and Kotak Mahindra – with the largest in the fifth spot. However, the three banks combined have a market share of less than one percent. The percentages reference the user interface used to initiate payments. UPI is for interbank payments, so the money comes from bank accounts.
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