UPI Market Share cap, Paytm Challenging Ola-Uber, American express In India, Tesla & China, Etc

Market Briefs

Main Briefs

India Delays UPI Market Share Caps, Favouring PhonePe and Google Pay Dominance:

Extension of Market Share Cap Deadline:

• India's mobile payments regulator is likely to extend the deadline for imposing market share caps on UPI payments, benefiting major players like Google Pay and PhonePe. The National Payments Corporation of India (NPCI) plans to delay the 30% market share cap by one to two years.

Impact on Market Dynamics:

• UPI has emerged as India's preferred payment method, with over 11 billion transactions monthly. PhonePe leads with 49% market share, followed by Google Pay at 37.4%. Paytm's share has dwindled to 8% amid regulatory challenges.

Regulatory Decision:

• The NPCI initially aimed to enforce the market share cap by January 2021 but postponed it to January 2025. The decision to extend further stems from the lack of a practical solution. However, a final decision is pending, subject to potential changes by year-end.

Potential Criticism and Concerns:

• The decision may draw criticism from ecosystem players urging NPCI to uphold commitments. Suggestions include incentivizing smaller players. However, favoring certain companies could raise concerns about fairness and investor sentiment.

Regulator's Response:

• The RBI recently held discussions with key UPI stakeholders to address infrastructure scaling, product expansion, and ecosystem challenges. NPCI's potential extension of the market share deadline was first reported by Moneycontrol.

Challenges and Incentives:

• Apart from market share concerns, regulators are exploring additional incentives for UPI providers. Unlike traditional credit card networks, UPI operates at no cost to merchants, posing financial challenges for ecosystem participants.

Paytm Ventures into Ride-Hailing via ONDC, Challenging Ola-Uber Duopoly:

Expansion into Ride-Hailing:

• Paytm, a leading fintech company, is venturing into the ride-hailing sector by offering auto-rickshaw rides in cities like Delhi, Bengaluru, and Chennai through the Open Network for Digital Commerce (ONDC). This move aims to challenge the dominant players, Ola and Uber, in the market.

Testing Phase:

• The ride-hailing feature on the Paytm app is currently in the testing phase and is accessible to select users. Over the past two years, Paytm has gradually introduced ONDC across various e-commerce categories like food delivery, grocery, fashion, and electronics.

Integration with Namma Yatri:

• Auto-rickshaw bookings on the Paytm app are powered by 'Namma Yatri', acting as the seller-side app in the transaction. Namma Yatri, backed by Juspay, operates consumer-facing apps for ride-hailing on ONDC and has facilitated millions of auto rides across several cities.

Business Model:

• Namma Yatri operates on a subscription model for drivers, foregoing per-ride commissions. However, buyer-side apps may charge seller apps a fee per ride for customer acquisition. The revenue model indicates potential monetization avenues for both parties involved.

Separate Entity and Backing:

• The ONDC features on the Paytm app are managed by a distinct entity called PAI Platforms, with no ownership stake held by Paytm. Nonetheless, PAI Platforms enjoys backing from Paytm's founder, Vijay Shekhar Sharma, emphasising Paytm's strategic interest in ONDC.

• Renewed Focus on E-commerce:

• ONDC has reignited interest among tech companies in India to re-enter the e-commerce space. Despite previous setbacks, companies like Paytm, Ola, PhonePe, Meesho, and Shiprocket are embracing ONDC to challenge the dominance of established players like Amazon and Flipkart.

ONDC Growth Trajectory:

• The ONDC platform has witnessed a significant surge in monthly retail purchases, growing sixfold in the last six months to reach 3.6 million transactions in March. This growth underscores the platform's potential to disrupt the online retail landscape in India.

Briefs, You Can’t Miss:

1. SBI announces it has no immediate plans to list its asset management companies, despite attractive valuations among peers.

2. Fitch Ratings affirms stable outlook for Axis Bank and ICICI Bank, citing supportive operating environment and strong domestic presence.

3. Sebi prohibits Add-Shop E-Retail, White Organic Agro, and 10 other entities from participating in securities markets.

4. American Express to establish a one-million square feet campus in Gurugram, India.

5. Adani Ports and Special Economic Zone reports handling 36.2 million metric tons of cargo globally in April.

6. Groww, a competitor to Zerodha, achieves profitability with a 266% revenue increase to Rs 1,277 crore in FY23.

7. Shiprocket, backed by Zomato, aims to expand its role in the e-commerce value chain.

8. Home First Finance seeks to raise $75 million through ECB from US DFC to support 30% business growth in FY25.

9. Honda inaugurates a new R&D facility to accelerate electrification efforts in India.

10. RBI considers policy changes that could potentially increase costs for Indian renewables.

11. Tata Steel completes India's first fully loaded voyage from Australia to India using B24 biofuel blend, reducing carbon emissions by 20%.

12. India becomes the third country globally to have a million Uber drivers.

World Briefs

• Honeycomb Insurance secures $36 million Series B funding from Zeev Ventures.

• Zydus Lifesciences gets final approval to market generic acne treatment in the US.

• Tesla increases job cuts in China due to declining sales.

• The US considers restrictions on China's access to AI software used in apps like ChatGPT.

• TikTok plans to label AI-generated content as technology becomes more widespread.

• WhatsApp, banned in China, resumes service for certain users on Meta's platform.

AI Briefs

• OpenAI provides insights into the inner workings of its AI's hidden instructions.

• Altera, a new startup, joins the trend of developing AI-powered autonomous players in the gaming industry.

• Checkfirst secures $1.5 million in pre-seed funding to implement AI in remote inspections and audits.

• Israeli startup Panax closes a $10 million Series A round for its AI-based cash flow management platform.

• Samsung Medison to acquire French AI ultrasound startup Sonio for $92.7 million.

• HCLTech collaborates with AWS to promote the adoption of Generative AI.

• OpenAI considers integration of NSFW content in age-appropriate context.

Company Of The Day

Company Name: ZOMATO

• Founder: Deepinder Goyal, Mohit Gupta, Pankaj Chaddah

• Year Of Foundation: Jul 2008

• Headquarter: Gurgaon, Haryana, India

• Industry:

  Zomato is a platform for discovering restaurants, enabling users to search for eateries, explore menus, and order food for delivery.

• Why Is It in the News?

  Zomato has raised $3.4 billion in funding through 24 rounds. Their latest funding, a Post-IPO Secondary round, occurred on March 6, 2024. The company has received support from 38 investors, with Morgan Stanley being the most recent.