With the Tez app, based on the Unified Payment Interface (UPI), Google has thrown its hat into the digital payments space. It’s a crowded sector that is projected to be worth $500 billion by 2020. Factor in the government’s push for a less-cash economy and little wonder the sector is seeing significant churn—from companies like WhatsApp, Hike and Airtel moving in on the one hand to consolidation on the other, as giants such as Amazon and Flipkart acquire smaller companies in the payments space.
But the faster the space grows, the more important it becomes to address its challenges. Lack of information and digital infrastructure could mean that uptake is skewed, with rural areas lagging. Then there is the question of cyber security. Finally, critical issues related to privacy and data protection remain unresolved.
It’s also, perhaps, a good time to ask why the government is in this space, funding BHIM, run by private entity National Payments Corporation of India—which also owns the UPI exchange. The conflict of interest is unnecessary.