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Payment service provision in times of accelerated market and regulatory change: The case of India
Journal of Payments Strategy & Systems,
17
(3),
271-290
(2023)
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).
Keywords: India; payments; payment service provider; PSP; payment gateway; payment aggregator; UPI; e-commerce; m-commerce
The full article is available to subscribers to the journal.
Author's Biography
Niklas Bartelt is an external lecturer at EBS University of Business & Law and Senior Adviser for DZ Bank AG. Prior to this, he was the founder and Managing Director of paydirekt. He has also served as the managing director responsible for transaction banking product management at DZ Bank AG.
Ulrich Hommel is Full Professor of Finance at EBS University of Business & Law, where he also heads the Chair of Corporate Finance & Higher Education Finance. Ulrich holds a PhD in economics from the University of Michigan, Ann Arbor, and a doctorate in business administration from WHU. His research interests include risk management, real option valuation, venture financing and corporate restructuring. Ulrich sits on business school boards in four continents and is the founding partner of XOLAS, a partnership consultancy advising business schools and universities.
Rushabh Patel is currently pursuing his master’s degree at the EBS University of Business and Law.
Shagufta Ali is currently pursuing her second master’s degree, an MBA at the EBS University of Business & Law.
