Google Pay, PhonePe, Amazon Pay want to be part of RBI’s e-rupee plan

Five payment firms including PhonePe, Google Pay and Amazon Pay want to be a part of the digital currency trial, initiated by the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI), by enabling transaction using the e-rupee. The Indian fintech firms Mobikwik and Cred are keen to join in, too.

The interested firms seem ready to launch e-rupee access for consumers by the yearend. However, the RBI appears to have no immediate plan for a launch and the e-rupee is likely remain in a trial phase for some more time.

If Unified Payments Interface (UPI) firms such as PhonePe, Google Pay and Amazon Pay, besides fintech firms as Mobikwik and Cred, are roped in, the plan of action could lead to growth in business as well as consumer base because, put together, the five interested payment companies have a market share of more than 85 per cent in UPI, through which nearly13 billion transactions are carried out on a monthly basis.

The inclusion of such firms could prove to be boost for project because, after pan-India dealings in e-rupee scaled 10 lakh on a daily basis in 2023, the figure has dropped to around Rs 1 lakh to Rs 2 lakh per day since then, according to a Reuters report.

The e-rupee is a Central Bank Digital Currency (CBDC) that is a digital version of the Indian rupee. The e-rupee operates on distributed ledger technology or blockchain. Unlike cryptocurrencies, the e-rupee is integrated into the RBI’s infrastructure.

In sync with the Prime Minister Narendra Modi-led government’s vision of a digital India, the RBI’s e-rupee project is aimed at providing a digital alternative to the physical rupee. It was launched in December 2022. 

Till 2023, only banks had the permission to provide e-rupee using mobile apps but in April this year, the RBI declared that payment firms could engage in e-rupee dealings, too, after due approval from the central bank.

The RBI launched the Digital Rupee for Wholesale, which caters to financial institutions for inter-bank settlements and the Digital Rupee for Retail for consumer and business transactions. The digital rupee would remove the printing cost of physical currency notes borne by the general public, businesses, banks, and the RBI.