Google Pay, PhonePe, and Amazon Pay are among five prominent payment firms seeking to participate in the Indian central bank’s digital currency pilot, offering transactions via the e-rupee. This information comes from three Reuters sources directly involved in the discussions. The other two applicants are Indian fintech companies Cred and Mobikwik.
The Reserve Bank of India (RBI) launched the e-rupee pilot in December 2022 as a digital alternative to physical currency. Despite an initial surge, e-rupee transactions have since declined, reflecting the challenges faced by central banks globally in popularising digital currencies.
Google Pay and Amazon Pay, offered by Alphabet Inc. and Amazon.com respectively, facilitate retail payments over India’s widely used Unified Payments Interface (UPI). Initially, the RBI permitted only banks to offer e-rupee transactions through their mobile applications. However, in April, it announced that payment firms could also offer e-rupee transactions once approved by the RBI.
The payment firms are collaborating closely with the RBI and the National Payments Corporation of India (NPCI), the domestic payments authority. They are expected to roll out access to the e-rupee over the next three to four months, according to Reuters sources.
Transactions using the digital currency had risen to over one million per day late last year but have since dropped sharply to about 100,000-200,000 per day, according to one source. Allowing these popular payment firms to offer e-rupee transactions could help boost volumes by expanding the user base, noted another source. Together, these five payment firms account for over 85% of digital payments via UPI, which averages around 13 billion transactions each month.
Despite efforts to popularise the e-rupee, the central bank has no immediate plans for a full-scale launch of the digital currency. “The e-rupee is likely to stay in the pilot stage for the next couple of years,” one source added.
