What’s going on here?
GooglePay, AmazonPay, and other digital payment titans are gearing up to join India’s e-rupee pilot—potentially supercharging transaction volumes.
What does this mean?
The Reserve Bank of India (RBI) rolled out the e-rupee in December 2022 as a digital stand-in for physical cash. Initially, only banks could handle e-rupee transactions via mobile apps, but an April expansion invited non-banking payment companies to the party. GooglePay, AmazonPay, Walmart-backed PhonePe, Cred, and Mobikwik are now poised to integrate e-rupee transactions into their platforms. They’re collaborating with the RBI and National Payments Corporation of India (NPCI) to launch the service within the next three to four months. While daily e-rupee transactions have dipped recently—from over a million to about 100,000-200,000—the entry of these major players is expected to ramp those numbers back up.
Why should I care?
For markets: A digital evolution in Indian transactions.
GooglePay, AmazonPay, and PhonePe participating in the e-rupee pilot could reshape India’s digital payments scene. These firms manage over 85% of digital payments through India’s Unified Payments Interface (UPI), which handles around 13 billion transactions monthly. Their involvement in the e-rupee initiative could tap into an immense user base and likely increase transaction volumes, aligning with India’s cashless economy ambitions.
The bigger picture: The future of RBI’s digital currency.
The RBI isn’t rushing the e-rupee’s full launch, planning to keep it in the pilot phase for a few more years. This deliberate pace permits fine-tuning and tech issue resolution. Including non-banking firms expands the pilot’s scope, offering insights that could hasten widespread adoption. Though the RBI, NPCI, and companies remain tight-lipped about specifics, this marks a major stride in modernizing India’s financial infrastructure and exploring central bank digital currency potentials.
