Google Pay, PhonePe, Amazon Pay, Cred, MobiKwik seek entry into RBI's eRupee pilot program: Report

Five prominent payment companies, including Google Pay, Walmart-backed PhonePe, and Amazon Pay, have applied to join the Reserve Bank of India's (RBI) pilot program for the eRupee, India's central bank digital currency (CBDC). Fintech firms Cred and Mobikwik have also submitted applications, according to Reuters.

The RBI launched the eRupee pilot in December 2022, but transaction volumes have declined significantly since an initial surge, reflecting the challenges central banks worldwide face in popularising digital currencies.

"While transactions using the digital currency had risen to over one million a day late last year, they have since declined sharply to about 100,000-200,000 a day," one source told Reuters..

Initially, the RBI restricted eRupee transactions to banks' mobile applications. However, in April, the central bank opened the door for payment companies to participate in the pilot, pending approval.

The five payment firms are now working closely with the RBI and the National Payments Corporation of India (NPCI) to integrate eRupee functionality into their platforms. They are expected to roll out access over the next three to four months.

Allowing these popular payment apps to offer eRupee transactions is seen as a strategic move to boost adoption and expand the user base.

"Allowing popular payment firms to offer eRupee should help lift volumes by widening the user base," a source explained.

Collectively, these five companies account for over 85% of digital payments processed through India's Unified Payments Interface (UPI), which handles an average of 13 billion transactions per month.

Despite efforts to promote the eRupee, the RBI is taking a cautious approach to its rollout.

"While continuing to try and popularise the eRupee, the central bank has no immediate plans to do a full-scale launch of the digital currency," a source stated. "The e-rupee is likely to stay in the pilot stage for the next couple of years."