Google may join ONDC to fight the Digital Payments Battle with Paytm and PhonePe


Ecommerce in India is essentially a duopoly between Amazon and Flipkart. The Open Network for Digital Commerce (ONDC) was created by the Department for Promotion of Industry and Internal Trade (DPIIT) to empower digital commerce by moving it away from a platform-centric approach and toward an open network.

Google, the US tech giant, is looking to join the ONDC network to expand its operations in India, including search and payments. Paytm and PhonePe, two of Google Pay’s competitors, have already joined the network and are exploring ways to integrate it into their systems.

The network was piloted in five Indian cities in April 2022: Delhi NCR, Bengaluru, Bhopal, Shillong, and Coimbatore. It has also launched real-time transactions in the retail and food delivery sectors, with a concentration on shops and restaurants for the time being.

With roughly 80+ merchants and digital platforms figuring out how to join the ONDC network, the network now looks to expand to 100 cities by August 2022.

Google, has a substantial presence in a variety of areas, including search, payments, workspace, entertainment, app store hosting, smartphone user interfaces, deeptech research, and even hardware. But not in the context of e-commerce as a whole. The ‘shopping’ tab on Google is also not the best strategy for the corporation to monetize its global reach of people.

Google has recently made it clear that it wants to work primarily with Indian SMBs (small and medium businesses) and has developed many search and discovery services. To that end, it has launched the Google My Business project, which includes business profiling, ad campaigns, workspace management with GSuite, and GPay payments

According to the ET story, Google is still thinking about how it might participate in the ONDC e-commerce trip and is expected to concentrate on the network’s discovery end.

India’s e-commerce business is expected to reach $200 billion by 2026, making it
one of the fastest-growing segments in the world. According to a Bain & Company report, India had the third-largest online shopper base in 2020, after China and the United States, with 140 million people. As a result, e-commerce is expected to become India’s principal mode of shopping, and it must be available to everybody.

As a result, ONDC was completed in December 2021. ONDC will govern all interactions across this open network, putting in place the groundwork, network membership and obligations, and counterparty regulations, as well as outlining how to handle complaints and settle disputes, similar to how NPCI manages UPI payments.

ONDC’s protocols will enable a diverse group of network members, such as Google, Paytm, and Flipkart, to work together so that various merchants can reach out to different consumers and vice versa. Interoperability and buyer-supplier inclusion will be used to facilitate discovery.

ONDC will also work through several platforms, allowing vendors to sell, connect, and improve their reach and management using technologies like digital inventory management, demand and supply data, consumer preferences, and more. The decision is also expected to improve India’s D2C ecosystem by allowing merchants to use a variety of existing e-commerce platforms.

While there are certain questions that ONDC needs to solve, such as how the interoperability will operate and how legal issues of consumer returns, refunds, and replacements will be addressed. Nevertheless, e-commerce experts believe ONDC will be the answer to the looming issue of unfair competition and democratization of Indian e-commerce.

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