The parliamentary standing committee on communications & information technology has recommended the government to endorse local apps after foreseeing the large market share of foreign-owned fintech apps including Walmart-owned PhonePe & Google Pay in the space of UPI (Unified Payments Interface).

National Payments Corporation of India (NPCI) has taken up the matter of focusing the UPI market share and it has planned imposing a 30 percent ceiling on UPI volume share for apps from next year.

The house panel said in a report listed in Parliament that the committee highlighted the fin-tech companies such as apps & platforms like PhonePe and Google Pay possessed by the foreign companies are dominating the Indian fintech sector & the entities. The market share of UPI was 36.39 percent for Google Pay & 46.91 percent for PhonePe in the terms of transaction volume in October-November 2023.

For the Reserve Bank of India and NPCI, the “regulation of Indian fintech apps would be more feasible” when compared to foreign entities that are present in multiple jurisdictions, the parliamentary committee said. Also the committee said several fintech companies were also being used for money laundering.

In that case, the committee National Payments Corporation of India recommended that there should be focus on promotion of local players in the Indian fintech landscape. However the market share in the UPI market is very low, the originally developed BHIM UPI is a good example of it.

Also the report added, “Since India is spotlighting on ‘Make in India’, the opinion of the committee is that local fintech entities should be promoted in the fintech sector as well”.

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