India’s Digital Payments Market Faces Uncertain Future

India was one of the fastest growing digital payments markets before the pandemic hit and now many of the companies leading the race face an uncertain future; the market features homegrown Paytm, India’s highest valued startup, government backed UPI and tech giants like Google and Amazon; Unified Payments Interface or UPI saw a doubling of volume before the country went into lockdown; while there has been some recovery the numbers have yet to come fully back; UPI has also changed the dynamic in the market by lowering the barrier to entry and bringing fees down, which has hit margins of private venture backed companies; the path forward is not clear at all, especially for companies like Paytm who rely on outside capital; “It will be unclear, possibly for 12 to 24 months. One doesn’t know how long,” said Rehan Yar Khan, a Managing Partner at Orios Venture Partners, to the FT. “If retail is going to continue to be subdued, then payments are going to continue to be subdued.”; one possible way forward is for payments companies to start building a product suite to cross sell on the data collected through payments transactions. Financial Times.