The Payments Council of India (PCI) is locked in a battle with Google over its app billing policies, which the PCI claims are detrimental to Indian startups and the digital payments landscape.
Seeking Government Intervention and Legal Changes
The PCI, representing major Indian payment companies, is urging the Indian government to intervene and amend existing laws to protect domestic startups and payment aggregators from what they perceive as “abusive and monopolistic policies” by Google. They point to South Korea and the European Union as examples of regions that have implemented legal frameworks to safeguard their tech industries from potential dominance by large multinationals.
Concerns Over Impact on Digital Payments
The PCI expresses serious concerns about the potential negative impact of Google’s policies on the Indian digital payment ecosystem. Many startups, particularly those offering virtual services, online education, and virtual goods, are removing their payment gateways from their Android apps to avoid complying with Google’s in-app payment mandate. This shift towards website-based transactions could significantly reduce the volume of real-time payment transactions, impacting both businesses and consumers.
Recent Escalation and Industry Reaction
The dispute escalated in March 2024 when Google delisted several prominent Indian consumer internet firms from the Play Store, claiming violations of its payment policies. While Google backtracked and reinstated most of the apps, it did so only after they removed their own payment functionalities, forcing them to rely solely on Google’s in-app payment system. The industry views this move as Google leveraging its dominant market share in the Android operating system to enforce unfair and anti-competitive policies.
Supporting Fair Play and Awaiting Regulatory Action
The PCI reiterates its support for the Competition Commission of India’s (CCI) 2022 ruling, which directed Google to offer multiple payment options within apps. However, implementing the CCI’s ruling could take time, leaving startups and payment companies vulnerable in the interim. While the industry hopes that increased adoption of third-party payment gateways, facilitated by the CCI’s ruling, could eventually drive up transaction volumes, the fight for control and fair play in the app economy continues.
The Indian government and relevant regulatory bodies are under pressure from the payments industry to address this situation and establish a fair and sustainable framework that benefits both Indian startups and users. The outcome of this complex battle remains uncertain, but it highlights the ongoing need to balance fostering a competitive digital ecosystem with protecting user interests.
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