By Jaspreet Kalra
MUMBAI (Reuters) – GooglePay, Walmart-backed PhonePe and AmazonPay are among five payments companies that plan to join India’s central bank’s pilot digital currency by offering transactions through the e-rupee, three sources directly involved in the talks said.
The other two Indian fintech companies Cred and Mobikwik have applied to participate in the pilot, the sources added.
The Reserve Bank of India launched a pilot project for the e-rupee, a digital alternative to physical currency, in December 2022. After an initial boom, e-rupee transactions have declined, reflecting the difficulties faced by central banks around the world in popularizing digital currencies.
Google Pay and Amazon Pay are payment applications offered by Alphabet Inc.’s Google and Amazon.com, respectively, that enable retail payments through the Unified Payments Interface (UPI), which is widely used in India.
Initially, the central bank had only allowed banks to offer e-rupees through their mobile applications. However, in April, it said that payment companies would also be able to offer e-rupee transactions through its platform following approval from the RBI.
The payment companies are working closely with the RBI and the National Payments Corporation of India (NPCI), the domestic payments regulator, and are expected to introduce access to the e-rupee over the next three to four months, the sources said.
The sources declined to remain anonymous because they are not authorized to speak to the media.
The RBI and NPCI did not respond to emails seeking comment, and the five companies declined to comment.
While the number of transactions involving the digital currency rose to over a million per day at the end of last year, it has since fallen sharply to around 100,000 to 200,000 per day, one of the sources said.
The ability of popular payment companies to offer e-rupees is likely to help increase volumes by expanding the user base, the second source said.
Together, these five payment companies account for over 85% of digital payments through UPI, averaging around 13 billion transactions per month.
While the central bank continues to try to popularize the e-rupee, it has no immediate plans to introduce the digital currency on a large scale, the second source said.
“The e-rupee is likely to remain in the pilot phase for the next few years,” the source added.
(Reporting by Jaspreet Kalra; Editing by Himani Sarkar)
