Google and Amazon poised to disrupt India's payment aggregation market

As global internet giants, Google and Amazon expand their capabilities in the nation, the payment aggregation business in India is expected to undergo a major change. The market, which has historically been controlled by local firms, is anticipated to experience fierce rivalry as these tech titans use their extensive resources and expertise to seize a portion of the lucrative Indian payments market.

The advent of these international competitors is probably going to cause a stir in the Indian payment aggregation sector, which has hitherto been controlled by regional competitors like Paytm, PhonePe, and Mobikwik. It is challenging for new entrants to establish a presence in the industry because of the high brand awareness and customer loyalty these domestic businesses have established.

The sources claim that the Reserve Bank of India on Wednesday published a list of 32 organizations that are permitted to function as online payment aggregators, among them Alphabet Inc.'s Google Pay, Amazon.com Inc.'s Amazon Pay, and Reliance Payment Solutions Ltd.

The identities were disclosed in order to "disseminate information and ensure more transparency," according to the central bank's website. Zomato Payments Pvt. Ltd., Pine Labs Pvt. Ltd., and Infibeam Avenues Ltd. are among the other approved entities.

The agency stated that 18 other applications are being reviewed, but they can continue to function as payment aggregators. Separately, four applications have been returned, including those of Axis Bank-led Freecharge Payment Technologies Pvt Ltd., and Paytm Payments Services Ltd. They can continue to operate without adding new merchants and reapply within 120 days after their return date, according to the RBI.

While the central bank has permitted tech giants to onboard digital merchants and handle payments from clients on their behalf, it regards big tech in the full-fledged banking market as a danger to financial stability and local banks.