The Indian central bank is looking to address the issue of transactions through the United Payments Interface getting concentrated with just two players, Alphabet-owned Google Pay and Walmart-owned PhonePe.
"About 80 percent of transcations in UPI are concentrated in two entities. The United States is addressing the issue (of the market dominance by big tech platforms) now. We are also looking at Europe to see how we can address this issue," said T Rabi Sankar, a deputy governor of the Reserve Bank of India (RBI).
While the National Payments Council of India (NPCI) had mandated a cap on onboarding of new users by UPI players with more than 30 percent market share, that has not been implemented yet.
At present, PhonePe enjoys a 46 percent share in overall monthly UPI transactions, followed by Google Pay at 38 percent and Paytm Payments Bank at 13 percent.
Sankar also said that UPI will see increasing internationalisation and adoption by other countries. It will not only be a payments bridge for Indians, but for connecting different countries, he said.
The central banker also said that it would be good if different countries can standardize their API protocols." We would need to avoid fragmentation of API, data standards. We have seen what fragmentation of tax standards have done across the world," he added.
He also said that currently the cross-border payments system is stuck in the past.
"Cross border payments are still stuck in the last century in terms of costs. It needs a lot of scope for improvement. And I think the CBDC (central bank digital currencies) are the most efficient answer to this," he explained.
Sankar also said that he is not enthusiastic about a completely cashless society and customers should always have the choice of selecting between different digital payment methods and cash.
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