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Fintech Firms in India Fret As NPCI Revises UPI Fees to Zero

Professor of Financial Economics and Part-time Value Investor, Transfin.
Feb 23, 2020 5:36 AM 5 min read

UPI fees revised to zero by NPCI. Changes in competition law could see buyer cartels penalised. China's 5G roll-out could be delayed on account of coronavirus outbreak. Ebay advances to sell its classified-ads business.




UPI fees revised to zero by NPCI.

No Money, More Problems

The National Payments Corporation of India (NPCI) has reportedly agreed to revise the UPI interchange and payment service provider fees to "zero" for all domestic UPI merchant (P2M) transactions. This decision will be enacted with retrospective effect from January 1st 2020.


The abolition of the fees, as per a circular, has been made for a period until April 30th 2020.


Revising merchant fees for UPI transactions is likely to negatively impact fintech players. It would mean companies like Google Pay, PhonePe, Amazon Pay and Paytm will not earn anything on UPI transactions. [NDTV Gadgets]


SBI Cards and Payments expects competition from new age fintech firms to increase. 

Taking Stock

Ahead of its IPO, SBI Cards and Payments Services has stated new-age fintech-led payments modes as formidable competitors.


Before an IPO, companies are required to list their competitors so that the public can make informed trading decisions. The payments wing of the country's largest lender listed other credit card and debit card companies are competitors, but also new fintech modes of payment, from whom it expects competition to increase in the future.


“Mobile, e-wallet, and tokenisation platforms, including the increasingly prevalent UPI, may present formidable competition as they are able to attract large payment volumes at low or no payment processing fees to merchants,” SBI Cards said in its prospectus. [BS]



Changes in competition law could see buyer cartels penalised.

Cartelling it Like it Is

As per proposed amendments to the Competition Act by the Ministry of Corporate Affairs (MCA), buyers forming a cartel could be penalised.


The MCA sought to give monetary and penal powers to the Director General for investigation under the Competition Commission of India (CCI). The draft amendments also seek to empower the Director General to investigate a person and send them to prison for up to six months or impose a fine of ₹1cr if the latter refuses to produce any book, paper, or document the former has asked for.


The proposed amendments are in the public domain for comments until March 6th. [BS]


After Amazon, Flipkart approaches Karnataka High Court against Competition Commission's probe. 

Two to Tango

Following in Amazon's footsteps, Flipkart has also approached the Karnataka High Court seeking to quash the order passed by the CCI over allegations of anti-competitive conduct.


Earlier this month, Amazon had approached the court, saying the competition regulator's order was passed “without application of mind" and that it would cause irreparable loss to the reputation of the company if an investigation is allowed in the matter. The High Court granted interim relief to Amazon and stayed the CCI's problem. [Bar & Bench]



Telecom Department reportedly clears Bharti Infratel-Indus merger.

Green Light

The Department of Telecommunications (DoT) has reportedly cleared the Bharti Infratel-Indus merger deal. This paves the way for the creation of one of the largest telecom tower companies in the world with over 1,63,000 towers, and also offering much-needed relief for debt-hit Vodafone Idea. [ET Telecom News]


China's 5G roll-out could be delayed on account of coronavirus outbreak.

Better Late than Sorry?

After the coronavirus outbreak hit China, Xi Jingping, Chairman of the Communist Party, said that profits from the country's 5G push would offset decrease in consumer spending on account of the virus. 


But such a scenario seems more and more unlikely as time passes. Tenders for six big 5G projects have been postponed since January 31st, Chinese government records show. It seems as if the coronavirus is going to have a definite impact on the 5G roll-out.


The projects postponed include an industrial internet project in Guangdong province, a hospital-related project in Jiangxi province, and a police-related project in Gansu province. Two leading providers of crucial fiberoptic cables also have headquarters and key production facilities in Wuhan city, the epicentre of the outbreak which is still under lockdown. [News18]



Google resists demands for documents from US states in probe.

No Show

As per a WSJ report, Google is resisting efforts to surrender emails, text messages and other documents sought by state investigators probing possible anticompetitive practices. The tech giant has also reportedly not agreed to a waiver that would give the coalition of state attorneys general access to documents obtained by the Justice Department for its own probe.


The alliance of nearly all US states that are banded together against Google says Google's refusal to share information hints that it is hiding something damaging. A Google spokeswoman however said the investigation has been advised by outside business consultants who could potentially share confidential information from Google with rival companies. [WSJ]


Ebay advances to sell its classified-ads business.

Moving Ahead

As per sources, EBay is advancing towards a potential sale of its classified-ads business, which could be worth roughly $10bn.


Private-equity firms, including TPG and Blackstone Group and strategic bidders including Naspers and German publishing company Axel Springer have recently expressed interest in the business. The company has also started reaching out to other potential buyers. [Fox Business]




India has some distance to go in fully shifting from pro-crony to pro-business policies, says CEA.  

Miles to Go...

India has some distance to go in fully shifting from pro-crony to pro-business policies, Chief Economic Adviser Krishnamurthy Subramanian recently said at  an alumni conference of his alma mater IIT-Kanpur.

It will be the pro-business policies that will enable the "invisible hands of the market" and also take the country to the goal of $5tr GDP, he added. Pro-crony policies on the other hand just help incumbents and that is something that we have to stay away from in enabling the invisible hands of the market. [Bloomberg Quint]


Extra Crunch

The financial year is coming to an end. Sorting one’s finances, understanding tax saving instruments and investment products can be…taxing.


Here are some important features of the top 5 tax-saving options for salaried employees. [Financial Express]


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