There are many things Google, the nearly $860 billion internet giant has always been good at. So good, in fact, that last week, the attorneys general of 50 US states launched an unprecedented joint antitrust investigation into its dominance.

But there are a few things Google has always been bad at, too. For instance, its seeming inability to build compelling transactional products (where people actually buy or sell real things) or financial ones (where people transfer money to each other).

Well, no more.

Thanks to a fortuitous set of circumstances, the last two years have seen India becoming the testbed for Google to prove to the world that it too could build great transactional and finance products.

Heck, it could become number one.

Google Pay, its two-year-old payments product, was the most downloaded fintech app globally in 2018, according to Sensor Tower, an app analytics data provider. Google Pay was designed for India and runs on the country’s real-time mobile-based payments system, Unified Payments Interface (UPI). 

Google has ended up so successful with Google Pay that it is now facing the unprecedented imposition of a market share cap by the NPCI (National Payments Corporation of India), the central-bank-monitored retail payments organisation, which runs UPI.

This year, Google Pay has been the number one payments app for five out of the eight months, according to a banker with knowledge of this data. With a 36.4% market share in volume of transactions on an average this year, it is neck and neck with Walmart-owned PhonePe, which has a 31.4% market share. Both have left erstwhile payments giant Paytm* behind—which has about a 24% market share. The rest of market is shared by roughly 100-plus UPI apps, including a government-promoted one called BHIM

NPCI is watching this lopsided growth of its pet project with unease stemming from the growing reach of multinational tech companies in the Indian digital ecosystem. More so because NPCI’s market share itself is being viewed by India’s reserve bank (RBI) as risky for its financial systems.

Call it self-preservation or call it a belated realisation of how digital network efforts quickly lead to monopolies, NPCI now wants to restrict companies that run on UPI to a maximum of 33% market share, both in terms of volume and value of transactions, as reported by The Economic Times earlier this month.

In less than three years, who would’ve thought that NPCI would create the conditions for Google to emerge as a leader in one of the areas it has never been good at?

AUTHOR

Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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