CCI Is Tightening The Noose Around Google Pay, And Google Is Miffed

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In what can only be called an interesting coincidence, soon after GPay recently cried foul about NCPI’s 30% cap on UPI transactions while WhatsApp Pay announced its official rolled out in India, the payments app from Google has now ended up in a pickle with the CCI.

Today, the Competition Commission of India (CCI) ordered for a detailed probe to be conducted against Google for employing unfair business practices related to Google Pay.

In its 39-page long order, the CCI’s Director-General (D.G.) has mentioned that the body views Google Pay to have ‘contravened various provisions of Section 4 of the Act’ and therefore it a detailed investigation against the same needs to be carried out at once.

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Note here that Section 4 of the Competition Act refers to the abuse of a dominant market position. According to the CCI body, it is of ‘prima facie’ view that Google’s conduct in the Indian payments’ space has been unfair and discriminatory.

Regulators have alleged that the tech giant has not been giving market access to other apps that could compete with Google Pay and thus, in turn, have violated different provisions of Section 4(2) of the Competiton Act.

Now, surprisingly enough, as mentioned earlier, this probe from the CCI interestingly coincides with two extremely significant events.

On Friday, WhatsApp Pay was finally allowed to roll itself out in India for the first time, after two years of back and forth negotiations and discussions with authorities. Along with it came a piece of shocking news for all existing players in the UPI payments’ space including Google Pay.

The National Payments Corporation of India, just minutes after announcing that they have green light WhatsApp Pay’s launch in the country, also mentioned that soon the body would be enforcing a cap which would not let third-party UPI payments apps to process more than 30% of all UPI transactions in a month single-handedly. This was when all hell broke loose.

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Not only did it hint at the probability that NCPI, fearing homegrown apps would lose market share against the Facebook-owned messaging giant, made this move out of thin air. But, it also set it in stone that going forward the UPI-regulatory body would put a leash around all players of foreign origin including Google Pay and PhonePe besides WhatsApp Pay.

Sajith Sivnandan, the Business Head at Google Pay, India, addressed the same in a statement and said that it came as a surprise as it could have severe implications over hundreds of millions of users who make use of UPI for daily transactions.

He also said that it could impact the further adoption of UPI and ultimately lay waste to the collective goal of increasing financial inclusion in India.

Thus, now, following how the series of events have developed so far, it begs us to ask:

  • Is this entire debacle a mere trickle-down effect of the entry of WhatsApp Pay into the payments’ space in India aka a WhatsApp Pay effect?
  • How will NCPI enforce the cap? What happens when one particular app reaches its threshold for the month? Do consumers need to rely on multiple payments’ apps in the near future?
  • How exactly has Google Pay denied market entry to other players?
  • Is the CCI’s move anyway linked to Google Pay opposing NCPI’s recent announcement?

Unfortunately, as of now, these questions remain unanswered. However, there’s one undeniable truth that everyone can unanimously agree on – the homegrown players such as PayTM, Reliance owned JioPay currently stand to benefit massively from this situation as they are armed with proper banking permits which don’t consider them as ‘third party apps’.

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