For a country and a government that has strained mightily to be viewed as pro-business, its imposition of a limit on how many customers a company can acquire in one of the hottest[1] areas of the technology and investment landscape -- one into which billions of dollars have been pumped -- is very bizarre behaviour.
That's what the Indian government did very recently when it decided to impose a 30% cap[2] on all UPI transactions per player. UPI, or United Payments Interface, is an instant, real-time, payments system first piloted by the government in 2016.
Money can be transferred between two bank accounts thanks to an India specific stack[3], or a collection of software utilities available as an API and targeted at entrepreneurs.
First, a little context and an explanation to this: Digital payments in India have exploded over the past 10 years. The technology is used by 160 million people[4] today thanks to the penetration of around 500 million smartphones, which are predicted to mushroom to 800 million by 2025.
Around 65-70% of Indians live in rural areas, and since the cost of servicing them hasn't been as profitable as their urban cousins, the banking sector has simply ignored[5] them since independence.
Therefore, a migrant labourer who had historically been unable to wire his or her wages to their families back home could now do so easily thanks to the fintech revolution in the country. Consequently, the market for digital payments is expected to blast off from less than $200 billion today, of which mobile payments account for just $10 billion, to $1 trillion in 2023 thanks to mobile payments, according[6] to a Credit