Google Pay, Amazon Pay, and Walmart-backed PhonePe are among the five payment firms seeking to join the Reserve Bank of India’s (RBI) digital currency pilot. This initiative aims to enhance transactions using the e-rupee, according to sources directly involved in the discussions.
Companies Joining the E-Rupee Pilot
Alongside Google Pay, Amazon Pay, and PhonePe, Indian fintech firms Cred and Mobikwik have also applied to participate in the pilot. The RBI launched the e-rupee, a digital alternative to physical currency, in December 2022. Despite an initial surge, e-rupee transactions have declined, reflecting the challenges central banks face in popularizing digital currencies globally.
Payment Firms and Their Role
Google Pay and Amazon Pay, offered by Alphabet Inc’s Google and Amazon.com respectively, facilitate retail payments via India’s Unified Payments Interface (UPI). Initially, the central bank allowed only banks to offer e-rupee transactions via their mobile applications. However, in April, the RBI announced that payment firms could also provide e-rupee transactions once approved.
Payment firms are collaborating closely with the RBI and the National Payments Corporation of India (NPCI), the domestic payments authority, and are expected to roll out access to the e-rupee within the next three to four months, the sources said.
Current Status and Future Plans
While digital currency transactions exceeded 1 million daily late last year, they have since declined to about 100,000-200,000 a day, according to one source. Allowing popular payment firms to offer e-rupee should help increase transaction volumes by expanding the user base, noted another source.
These five payment firms account for over 85% of digital payments via UPI, which averages around 13 billion transactions each month. Despite efforts to popularize the e-rupee, the central bank does not plan a full-scale launch of the digital currency anytime soon.
“The e-rupee is likely to stay in the pilot stage for the next couple of years,” the source added.
No Official Comments Yet
The sources declined to be identified 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 involved also declined to comment.