Less than three years after its start, Chinese smartphone maker Xiaomi Corp. has closed its financial services division in India. Recently, the business took the Mi Pay and Mi Credit apps out of the local Play Store into its own app store. Mi Pay has also been taken off the NPCI’s list of authorised UPI apps because it allowed users to execute transactions on the nation’s UPI payments network.
Mi Pay has also been taken off the NPCI’s list of authorised UPI apps because it allowed users to execute transactions on the nation’s UPI payments network.
The sudden closure of the financial services branch is a setback for Xiaomi India, which leads the domestic smartphone market and aggressively extended its product selection to increase revenues because the company’s hardware division has extremely thin profit margins.
“We discontinued the Mi Financial Services in March 2022 as part of the yearly strategy assessment effort and in response to an increased focus on our core business services. We were able to connect and assist thousands of consumers in just 4 short years. Following the publication of the article, a Xiaomi India official issued a response to TechCrunch saying, “We are cooperating with our partners and assisting our customers throughout this process.
“We closed the Mi Financial Services in March 2022 as part of the yearly strategy assessment effort and in response to improved focus on our core business services,” the firm spokeswoman told Reuters.
Xiaomi unveiled Mi Pay in India in March 2019. The app had over 20 million registered users in the country that year alone, according to corporate executives at the time.
Later in the year, the business released Mi Credit, an app that offered low-interest loans to users for amounts ranging from $70 to $1,400. It quickly granted loans to consumers through partners by looking at transaction information and other facts in users’ texts and call logs to assess their credit-worthiness.
Manu Jain, then-head of Xiaomi India, stated to media outlets in August of last year that the business hoped to use the Mi Credit and Mi Pay apps to become one of the major players in India’s financial industry. According to him, India was the second-largest market for Mi Credit after China.
Numerous industry titans, such as Facebook and Google, have entered the Indian digital finance market and are now providing small firms with loans through partners. According to projections from the Boston Consulting Group, the value of digital loans is estimated to reach $1 trillion by 2025.
Jain, who has since moved on to a different position within the company, stated last year that the company was trying to expand its financial offerings to the South Asian market, including insurance, credit line cards, and gold loans.
It’s still unknown why Xiaomi stopped providing financial services in the nation, but the decision coincides with the central bank of India’s proposal of strict regulations governing lending, requiring what information lenders can access on a customer’s phone and broader disclosures about the terms of their credit agreement.
For potentially cheating tax authorities, Xiaomi is under investigation in India, its largest market outside of China.
The federal financial crime bureau in India seized the assets of Xiaomi, worth $676 million, in April on the grounds that the business had transported money abroad illegally while passing the transfers off as royalties.
The Chinese smartphone manufacturer, which denies any wrongdoing, asserts that the measure “essentially froze” operations in its vital Indian market.
Many Chinese businesses have found it challenging to conduct business in India as a result of political chaos following a border incident in 2020.
Since then, India has tightened regulations for Chinese businesses investing in India and banned over 300 Chinese apps, including well-known ones like TikTok, citing security concerns.