Google Pay VP: UPI Market Share Cap Not a Concern, Ample Opportunities for All Players

ET World Leaders Forum | UPI market share cap not a problem, there is scope for everyone: Google Pay VP

Ambarish Kenghe, vice president of fintech giant Google Pay, said that the Unified Payments Interface (UPI) market is huge and several players are operating within it. "I don't see a challenge with this issue of market share cap because I think there is a large number of players who are operating with a large number of apps and there is scope for everyone," Kenghe said at the ET World Leaders Forum held in New Delhi on Saturday. The central government and the National Payments Corporation of India (NPCI) had earlier proposed a 30% market share cap in the UPI segment to avoid market dominance and duopoly. However, earlier this month, ET reported that enforcing this directive seems unlikely, with just over four months remaining for the deadline. On August 28, Sameer Nigam, chief executive of PhonePe, said that the market share cap directive is hindering the company's initial public offering (IPO) plans. Walmart-backed PhonePe is currently the largest UPI payment app in India, holding around 48% of the market share in terms of transaction volume, followed by Google Pay with 37% market share. The ET World Leaders Forum Live Updates According to Kenghe, when lot of players running after the same thing, it gets harder because it becomes crowded, but there are enough players in the market to keep it safe and secure. In July, PhonePe and Google Pay dominated the UPI market, accounting for more than 85% of the 14.4 billion UPI transactions. PhonePe clocked 6.9 billion transactions, while Google Pay recorded 5.3 billion in the month. Paytm (One 97 Communications) ranked third with 1.1 billion transactions, and Cred followed in fourth place with 142 million payments. On the use of AI in fraud detection, Kenghe said that Google Pay saved around Rs 12,000 crore last year on financial frauds using AI. Kenghe pointed out that artificial intelligence is not a new concept; it's been around for a long time, with generative AI already being nearly a decade old. He emphasized that various use cases of AI have existed for many years.

ET WLF 2024: Market share cap on UPI transactions not an issue, says Ambarish Kenghe

As players in the Unified Payments Interface (UPI) ecosystem await clarity on the long-standing issue of a ceiling on market share, Google vice president Ambarish Kenghe said he does not anticipate any challenges since there is scope for everyone in the segment. "The regulators and government are balancing a lot of things, some of which we are not privy to... I don't see a challenge with this issue of market share because there are a large number of players operating and there is scope for everyone," he said. Kenghe, who helms Google Pay in India and Asia Pacific region, was in conversation with ET's Samidha Sharma at the ET World Leaders Forum on Saturday. Google Pay is the second largest UPI app, according to transaction volume, only behind Walmart-backed PhonePe. The two players together command about 85% market share, in terms of UPI volume, and stand to be affected the most if a cap is imposed on market share. The National Payments Corporation of India, which manages the UPI railroad, had in 2021 proposed a 30% market share cap on UPI transaction volume to avoid market dominance and duopoly. However, it has yet to implement the cap. On August 28, Sameer Nigam, chief executive of PhonePe, said at the Global Fintech Festival that the market share cap directive is acting like an overhang, hindering the company's initial public offering plan. ET reported on August 20 that enforcing this directive seems unlikely, with just over four months remaining before the deadline. PhonePe currently holds about 48% market share, followed by Google Pay (37%). Notably, Google Pay's market share has been declining over the past few months. However, Kenghe said that the UPI system remains interoperable with customers using a variety of apps. "Almost 90% of P2M (merchant payment) transactions from Google Pay terminate outside Google Pay... of all transactions that Google Pay does 65% end up outside Google Pay. So, it's already an interoperable system... and many of the users are using different apps," he said. Kenghe said that when there are many players running after the same thing, it gets harder, and advised startups in the segment to find niche plays. "There is enough competition... on the question of viability, whether they are economically sustainable, when there's a lot of players running after just that single thing, single market, maybe it's harder because it gets crowded, but there are enough players in the market to keep it safe and secure. The thing that I would urge for startups is, instead of doing the same thing, you should think about what niche you have," he said. Big tech firms, including Google and Amazon, which operate in India's fintech segment, have not applied for licences to become non-banking financial companies, contrary to their Indian counterparts. However, Kenghe said that Google is not shying away from applying for any licences. "I think it's about whether there is a use case for it, whether there's something uniquely that we can contribute, and where we can contribute to it... For example, we have a payment aggregator licence, so we're not shying away from licensed businesses," he said. Kenghe also highlighted Google's focus on contributing to India's digital public infrastructure. He mentioned Google's latest investment in Namma Yatri, which is a mobility app built on ONDC (Open Network for Digital Commerce) protocols. "We are making these investments both internally as well as externally, in the DPI as well as public spaces," he said. He also pointed out the low credit penetration in India, and underscored the opportunity in this segment. "The ratio of credit cards to population in India is 6-7%, in the US that number is upwards of 200%. But how do you enable credit in a very responsible way, in a way that keeps the ecosystem secure, its regulated apps and the lenders secure, as well as doesn't over leverage the consumer? So, you're going to see much more stuff here. Artificial Intelligence will help a lot," Kenghe said.

ET WLF 2024: Market share cap on UPI transactions not an issue, says Ambarish Kenghe

As players in the Unified Payments Interface (UPI) ecosystem await clarity on the long-standing issue of a ceiling on market share, Google vice president Ambarish Kenghe said he does not anticipate any challenges since there is scope for everyone in the segment. "The regulators and government are balancing a lot of things, some of which we are not privy to... I don't see a challenge with this issue of market share because there are a large number of players operating and there is scope for everyone," he said. Kenghe, who helms Google Pay in India and Asia Pacific region, was in conversation with ET's Samidha Sharma at the ET World Leaders Forum on Saturday. Google Pay is the second largest UPI app, according to transaction volume, only behind Walmart-backed PhonePe. The two players together command about 85% market share, in terms of UPI volume, and stand to be affected the most if a cap is imposed on market share. The National Payments Corporation of India, which manages the UPI railroad, had in 2021 proposed a 30% market share cap on UPI transaction volume to avoid market dominance and duopoly. However, it has yet to implement the cap. On August 28, Sameer Nigam, chief executive of PhonePe, said at the Global Fintech Festival that the market share cap directive is acting like an overhang, hindering the company's initial public offering plan. ET reported on August 20 that enforcing this directive seems unlikely, with just over four months remaining before the deadline. PhonePe currently holds about 48% market share, followed by Google Pay (37%). Notably, Google Pay's market share has been declining over the past few months. However, Kenghe said that the UPI system remains interoperable with customers using a variety of apps. "Almost 90% of P2M (merchant payment) transactions from Google Pay terminate outside Google Pay... of all transactions that Google Pay does 65% end up outside Google Pay. So, it's already an interoperable system... and many of the users are using different apps," he said. Kenghe said that when there are many players running after the same thing, it gets harder, and advised startups in the segment to find niche plays. "There is enough competition... on the question of viability, whether they are economically sustainable, when there's a lot of players running after just that single thing, single market, maybe it's harder because it gets crowded, but there are enough players in the market to keep it safe and secure. The thing that I would urge for startups is, instead of doing the same thing, you should think about what niche you have," he said. Big tech firms, including Google and Amazon, which operate in India's fintech segment, have not applied for licences to become non-banking financial companies, contrary to their Indian counterparts. However, Kenghe said that Google is not shying away from applying for any licences. "I think it's about whether there is a use case for it, whether there's something uniquely that we can contribute, and where we can contribute to it... For example, we have a payment aggregator licence, so we're not shying away from licensed businesses," he said. Kenghe also highlighted Google's focus on contributing to India's digital public infrastructure. He mentioned Google's latest investment in Namma Yatri, which is a mobility app built on ONDC (Open Network for Digital Commerce) protocols. "We are making these investments both internally as well as externally, in the DPI as well as public spaces," he said. He also pointed out the low credit penetration in India, and underscored the opportunity in this segment. "The ratio of credit cards to population in India is 6-7%, in the US that number is upwards of 200%. But how do you enable credit in a very responsible way, in a way that keeps the ecosystem secure, its regulated apps and the lenders secure, as well as doesn't over leverage the consumer? So, you're going to see much more stuff here. Artificial Intelligence will help a lot," Kenghe said.

ET World Leaders Forum | UPI market share cap not a problem, there is scope for everyone: Google Pay VP

Ambarish Kenghe, vice president of fintech giant Google Pay, said that the Unified Payments Interface (UPI) market is huge and several players are operating within it. "I don't see a challenge with this issue of market share cap because I think there is a large number of players who are operating with a large number of apps and there is scope for everyone," Kenghe said at the ET World Leaders Forum held in New Delhi on Saturday. The central government and the National Payments Corporation of India (NPCI) had earlier proposed a 30% market share cap in the UPI segment to avoid market dominance and duopoly. However, earlier this month, ET reported that enforcing this directive seems unlikely, with just over four months remaining for the deadline. On August 28, Sameer Nigam, chief executive of PhonePe, said that the market share cap directive is hindering the company's initial public offering (IPO) plans. Walmart-backed PhonePe is currently the largest UPI payment app in India, holding around 48% of the market share in terms of transaction volume, followed by Google Pay with 37% market share. The ET World Leaders Forum Live Updates According to Kenghe, when lot of players running after the same thing, it gets harder because it becomes crowded, but there are enough players in the market to keep it safe and secure. In July, PhonePe and Google Pay dominated the UPI market, accounting for more than 85% of the 14.4 billion UPI transactions. PhonePe clocked 6.9 billion transactions, while Google Pay recorded 5.3 billion in the month. Paytm (One 97 Communications) ranked third with 1.1 billion transactions, and Cred followed in fourth place with 142 million payments. On the use of AI in fraud detection, Kenghe said that Google Pay saved around Rs 12,000 crore last year on financial frauds using AI. Kenghe pointed out that artificial intelligence is not a new concept; it's been around for a long time, with generative AI already being nearly a decade old. He emphasized that various use cases of AI have existed for many years.