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Payment service provision in times of accelerated market and regulatory change: The case of India

Author

Listed:
  • Bartelt, Niklas

    (EBS University of Business & Law, Germany)

  • Hommel, Ulrich

    (Professor of Finance, EBS University of Business & Law, Germany)

  • Patel, Rushabh

    (Student, Master of Business Administration, Germany)

  • Ali, Shagufta

    (Student, Master of Business Administration, Germany)

Abstract

This paper presents an analysis of the Indian payment system with a focus on payment service providers (PSPs). At the core, it assesses the state of competition by analysing market concentration, barriers to entry and the counterbalancing influence of buy-side market power. This is preceded by a detailed presentation of the institutional characteristics of the Indian payment landscape, in particular the role of the Unified Payments Interface (UPI) and regulatory intervention. Throughout the course of this investigation, we contrast India with the European payment markets (Eurozone plus affiliated countries), which helps to gauge the role of governmental bodies in the light of the very different state of e-commerce market development. The analysis arrives at the conjecture that, despite significant institutional, regulatory and market structure differences, the state of competition is remarkably similar to the European benchmark. The diversity of viable business models furthermore indicates a well-developed and differentiated PSP service offering in India (as in Europe).

Suggested Citation

  • Bartelt, Niklas & Hommel, Ulrich & Patel, Rushabh & Ali, Shagufta, 2023. "Payment service provision in times of accelerated market and regulatory change: The case of India," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 17(3), pages 271-290, September.
    • Handle: RePEc:aza:jpss00:y:2023:v:17:i:3:p:271-290
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    More about this item

    Keywords

    India; payments; payment service provider; PSP; payment gateway; payment aggregator; UPI; e-commerce; m-commerce;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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