GooglePay, PhonePe, and AmazonPay are among five payment firms seeking to join the Indian central bank's digital currency pilot by offering transactions via the e-rupee. Indian fintech firms Cred and Mobikwik are the other two that have applied to join the pilot, the sources added.
The Reserve Bank of India started a pilot for the e-rupee, a digital alternative to the physical currency, in December 2022. After an initial surge, e-rupee transactions have declined, reflecting the struggle central banks globally have faced in popularising digital currencies.
Google Pay and Amazon Pay are payments applications offered by Alphabet Inc's Google and Amazon.com, respectively, that facilitate retail payments over India's widely used Unified Payments Interface (UPI).
Initially, the central bank had permitted only banks to offer e-rupee via their mobile applications, but in April 2024 it said payment firms could also offer e-rupee transactions via their platform once approved by the RBI. Payment companies are working closely with the RBI and National Payments Corporation of India (NPCI), the domestic payments authority, and are expected to roll out access to e-rupee by the end of 2024.
In 2022, the Reserve Bank of India (RBI) was preparing to launch a retail digital rupee pilot after successfully testing its wholesale use. It was initially planned to include major Indian banks and aims to introduce a digital currency to complement payment methods. The pilot involved up to 50,000 users per bank, and planned to integrate the digital rupee into current digital banking services, supported by the National Payments Corporation of India (NPCI).
The introduction of a central bank digital currency (CBDC) in India is part of a broader push towards digital payments, influenced by trends like increased acceptance of digital transactions by MSMEs and the rise of private cryptocurrencies. The RBI aims to provide a secure, government-backed digital payment alternative while strengthening cyber security measures to protect against potential risks.
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