In order to capture the digital retail market, foreign companies are competing, Google, Facebook, Visa are pushing
Foreign companies are currently competing to capture India’s digital retail market. Technology giants Facebook, Amazon and Google and companies like Visa Inc. and MasterCard offering credit card services have come face to face. These companies are preparing to apply for a license to operate retail payments and settlement systems in the country.
Last date for application is 31 March
Before March 31, some more companies may join the competition before the application deadline. In a market where cash is still considered a king, digital payments are getting a big boost, as 130 crore people in India are increasingly adopting services such as online shopping and online gaming and streaming. A report estimates that in 2023 there will be $1 trillion in online payments in India. That’s why companies have started making digital transactions more attractive. So that a substantial commission can also be taken advantage of.
After corona, mobile payment boom
Paytm founder Vijay Shekhar Sharma said that India’s mobile digital payments are witnessing a huge increase after the epidemic. Now is also a good time to open up the digital payment routes in a better way, so that more and more people can make payments through this. Companies such as Amazon, Visa, Indian banks ICICI Bank Limited and Axis Bank Limited as well as fintech startups Pine Labs and Billdesk are coming together to form a consortium.
Google and Facebook are with Reliance
The second consortium is Reliance Industries and its partners Facebook, Google. Both of them invested more than $10 billion in Reliance’s Jio last year. Sharma’s Paytm is the leader of a group that includes Ola and at least five other companies. The fourth consortium comprises Tata Group, MasterCard, telecom operator BhartiAirtel Limited and retail banks Kotak Mahindra Bank Limited and HDFC Bank Limited.
A fierce battle is about to take place
This competition is going to be quite fierce. Because the regulator is going to give only one or two licenses to the Reserve Bank of India. However, it may take at least six months to decide the name. It may take more than a year to be implemented. The license will be contested against the only National Payments Corporation of India supported by more than 50 retail banks.
UPI started in 2016
Its Unified Payments Interface (UPI) protocol began in 2016. It revolutionized digital payments by allowing users to link their phone numbers to their bank accounts. This made the transaction of money as easy as sending a single message. The effect of this was that the transmission of money started to happen immediately and at least in cost.
Nandan Nilekani, the co-founder of IT services company Infosys, said that being able to have more licensees and work with each other with these systems will further boost digital payments. However, commissions on digital payments are very low. But the size of the transaction is quite large.
