There is a rhyme and a reason why the app bans are happening and there is a genuine problem that the government has been seeing as citizens have been complaining about the Chinese lending apps, said Sameer Nigam, PhonePe’s founder and chief executive officer at the CNN News18 Town Hall event in Bengaluru on Tuesday.
“There is something that would have triggered this, some major crossing-the-line affair that would have caused this and that’s why Meity acted on it at this scale,” Nigam said.
Nigam’s response comes as the Ministry of Electronics and Information Technology (MeitY) has issued a directive to app stores to block more than 200 loan and betting apps, which includes lending platforms like Kissht, PayU-backed LazyPay and Ola Avail Finance.
“See, there is money laundering happening with gambling apps. I think the method adopted for solving, needs work…the governments have pressure everywhere to try and adopt new laws at breakneck speed and when they do that or introduce regulations then the entire industry is upset,” Nigam said.
This is also crucial for PhonePe as Reportedly, the fintech player is in the process of acquiring buy-now-pay-later (BNPL) fintech startup ZestMoney at a deal size of $200-$300 million. ZestMoney’s close competitor LazyPay has been marked in the list of loan apps to be banned.
“There are two or three structural challenges. One is global by the way, regulators worldwide are struggling with how fast technology is evolving and its implications on a person’s life. How do we regulate free speech in social media for example,” he said.
It is a cycle where we will reach an equilibrium. Telecom went through it, consumer internet is way harder this way, Nigam said.
Talking about other issues pertaining to the fintech industry, Nigam said that there are multiple regulators in this sector.
“In the physical world, banking NBFC, Insurance these are all different businesses and you can slice them by regulations and say that one company do this and some cannot,” He said, adding that, in the digital era it defies logic to not allow very easy distribution of services when you want financial inclusion at scale,”
Nigam also pointed out that in the last four to five years, government agencies as well as the Tregulators actually been very open to continuous dialogue with the sector. “That’s really helpful,” he said.
“I’m also starting to see that the sector itself is maturing a bit, in the tech world anyone with a server can cause chaos, we saw that with the crypto market. But I think people are starting to grow up” Nigam added.
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