UPI market share rules postponed; Amazon plays down India layoffs

Also in this letter:
■ Amazon plays down India layoffs, calls them ‘voluntary’
■ ShareChat shuts down Jeet11, lays off 5% of employees
■ Despite downturn, 60% of firms plan to spend more on tech in 2023: study

The National Payments Corporation of India (NPCI), which manages the Unified Payments Interface (UPI), has decided to postpone the deadline for complying with its rules capping the market share of individual UPI apps to December 31, 2024.

The contentious rules, announced in 2020, say no single UPI app can have a market share of more than 30%. They were originally scheduled to take effect from January 1, 2023.

NPCI statement: “Taking into account the present usage and future potential of UPI, and other relevant factors, the timelines for compliance of existing TPAPs (third-party apps) who are exceeding the volume cap, is extended by two years, ie till December 31, 2024 to comply with the volume cap,” NPCI wrote in a circular.

NPCI also said it is “imperative” that existing and new UPI players (banks and non-banks) scale-up their consumer outreach for the growth of UPI and “achieve overall market equilibrium”.

We first reported on June 6 that UPI apps were likely to get more time to comply with the rules.

Duopoly: Google Pay and PhonePe dominate UPI payments and have a combined market share of more than 80%. Other UPI players include Paytm, Amazon Pay and WhatsApp Pay.

According to NPCI data for September, PhonePe and Google Pay had market shares of 46.7% and 33.3%, respectively, in terms of the number of UPI transactions handled.

Backstory: Last month we reported that the union government would not intervene in the matter, following contrasting demands by rival digital payment providers.

While Paytm, the third-ranking UPI app, “believes market capping should be implemented as per the timeline (December 2022), “ market leaders PhonePe as well as Google Pay had independently approached NPCI, seeking an extension of the deadline by at least three years.

Amazon plays down India layoffs, calls them ‘voluntary’

Amazon has sought to play down its layoffs in India in a letter to the labour ministry, saying they were part of a voluntary separation programme with a severance package.

The company also said it has extended the deadline for employees to revisit or revoke their decision to December 6. The previous deadline was November 30.

Catch up quick: Labour secretary Arti Ahuja summoned Amazon officials last week and sought a written explanation from the company following a complaint by Nascent Information Technology Employees Senate (NITES) on the Big Tech firm’s layoffs in India.

Amazon wrote in its letter, “VSP is a completely voluntary programme under which employees opt to receive a fair severance package. At no stage will Amazon India coax or direct its employees to opt for the VSP.”

We reported on November 25 that the company had told labour authorities at a hearing in Bangalore more or less what it wrote in the letter – that it has not sacked any employees, merely let go of those who opted for the VSP.

Also Read | Amazon shuts three India businesses in a week

CEO defends global layoffs, again: Meanwhile, Amazon CEO Andy Jassy Amazon has once again defended massive layoffs at the company, saying, “We just felt like we needed to streamline our costs”.

Speaking at the New York Times Dealbook Summit on Thursday, Jassy said Amazon’s retail business grew rapidly in the early days of the pandemic and this “forced us to make decisions at that time to spend a lot more money and to go much faster in building infrastructure than we ever imagined we would”.

Although Amazon has not revealed the number of layoffs planned, various reports have said the company will sack around 10,000 employees across its devices, retail, and human resources divisions.

Earlier this month, Jassy warned employees to expect more layoffs in early 2023 “as leaders continue to make adjustments”.

Also Read | Uber CEO says won’t cut jobs despite mounting tech layoffs

Social media startup ShareChat said on Friday it has laid off about 5% of its employees as a result of a shuttering its fantasy gaming vertical Jeet11.

The Twitter-backed company employs over 2,500 people, according to its website. Sources told us about 100-120 staffers have been laid off.

Short life: Launched in 2020, Jeet11 was ShareChat’s answer to Dream11 which, like ShareChat, is backed by Tiger Global.

Gaming or gambling? Several states in India continue to maintain a ban on betting apps, putting the likes of Dream11 and Mobile Premier League in a legal quagmire. These startups have said that fantasy games are more about decisive strategy than luck.

In 2017, the Punjab High Court ruled that fantasy sports are a game of skill and not chance, and this was upheld by the Supreme Court.

Last month, the All India Gaming Federation moved the Madras High Court to challenge an ordinance seeking to ban online gambling and regulate online gaming in Tamil Nadu.

ETtech Deals Digest: a glimmer of hope for Indian startups

The final month of 2022 is here, a year which saw Indian startups struggling to raise money and many announcing layoffs. The past 11 months have seen a massive downturn not just for startup funding in India but the tech world globally. High inflation, rising interest rates, and the spike in energy prices triggered by the war in Ukraine, among other things, contributed to the tech turmoil.

The last few weeks of 2022, however, seem to have brought a glimmer of hope for India’s startup ecosystem as several companies raised funds this week.

While investors bet heavily on agritech startups like MoooFarm and DeHaat, Table Space, startup that offers coworking spaces, raised the biggest round at $300 million.

Table Space’s raise comes amid robust demand for coworking spaces. ET reported on Nov 29 that startups accounted for over 30% of the leasing activity in 2022.

Here are all the startups that raised funds this week.

Despite economic headwinds, 60% of companies still plan to increase tech and digital spending in 2023, according to a new study by management consulting firm Boston Consulting Group, titled ‘Mind the Tech Gap’.

Another 36% said they will maintain the current pace of these investments, and only 4% said they planned to cut spending in these areas.

Yes, but: The majority of these digital transformations fail to achieve their objectives, BCG said.

The study is based on a survey of nearly 2,700 executives from companies in a wide range of industries across 13 countries.

Top complaints: The top four complaints companies had about their digital partners and vendors were cumbersome coordination across vendors (84%); cookie-cutter solutions (74%); inadequate training provided to companies’ teams (69%), and lack of help in prioritising steps of the transformation (68%).

“What’s clear from our survey is that most companies are struggling to deliver bottom-line results for their digital transformations and are facing consistent pain points with their tech partners and vendors”, the report said.

Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai and Siddharth Sharma in Bengaluru. Graphics and illustrations by Rahul Awasthi.