The oligopoly that controls India’s credit cards and e-wallets may be soon shattered
Only a few players rule India’s retail payments system.
For credit cards, big banks such as HDFC Bank, State Bank of India, ICICI Bank, Axis Bank, and Citibank manage about 28.99 million cards out of the total 37.4 million in circulation, i.e., over 75% of the market. The situation is no different in the debit card segment, according to data from the Reserve Bank of India (RBI).
In the digital payments ecosystem, Paytm is the 800-pound gorilla. The mobile wallet firm claims to have over 200 million users in India, which is 40% of the country’s more than 500 million mobile phone users.
This concentration of power is making India’s banking regulator increasingly uncomfortable, especially as the country’s retail payments ecosystem expands rapidly. Not only does the situation put a large number of users at risk if even one company goes under, a select few firms also end up with the personal data, like spending and preferences, of a large number of people. That’s business intelligence worth its weight in gold.
So, the RBI now plans to step in, and will release a consultation paper by Sept. 30 on how to widen the market. “The RBI plans to encourage more players to participate in and promote pan-India payment platforms so as to give a fillip to innovation and competition in the sector,” the central bank said on June 06.
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Nupur Anand
Quartz India
June 07, 2018
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