Insights Magazine from CMSPI | Nov 2021 Edition

Insights Magazine from CMSPI

Page 27 | November 2021

INDIA CAPS DIGITAL WALLET MARKET SHARE, ORDERS INTEROPERABILITY

Digital payment methods have been growing in popularity in India recently, largely due to the success of the Unified Payments Interface. The UPI is a system developed by the National Payments Corporation of India and facilitates interbank transactions supporting both peer-to- peer and business-to-consumer transactions. Two major changes in the past year will impact both the UPI market and the market for digital wallets. In November 2020, the NPCI announced a 30% market share cap on any non-bank provider operating on the UPI that took effect this January. Any providers already exceeding the cap – only Bangalore-based payments app PhonePe and

Google Pay as of this summer – have until January 2023 to comply. This May, the Royal Bank of India mandated full interoperability between digital wallets for both consumers and merchants, meaning someone using a Paytm wallet, for example, must be able to send funds to someone with a PhonePe wallet. Similarly, all wallets will have to support acceptance at any merchant location where any UPI wallet is accepted. Wallets must comply by the end of March 2022. Non-bank providers dominate the UPI and limiting the market share of any particular provider should help with competition. But the cap will not apply to digital wallets operated by banks, limiting its effectiveness.

RBA SHAKES UP PAYMENTS REGULATION IN AUSTRALIA

On October 22nd, the Reserve Bank of Australia released its final decision on changes to payments regulation following a period of consultation on a number of areas, including dual network debit cards, least cost routing, interchange caps, and BNPL ‘no-surcharging’ rules. Upon review, while there seems more can be done, the findings demonstrate the RBA’s commitment to recognize and swiftly act upon merchant feedback. With large regulatory changes like this, it’s key that merchants understand the opportunities and implications for their business. Please click to listen to how the RBA’s decision can impact your business.

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