Sources: Xiaomi quietly discontinues its Mi Pay and Mi Credit financial services apps in India after three years
Context & Ripple Effects
Xiaomi entered Indian fintech at the end of 2019, launching Mi Credit as a digital lending platform offering loans between roughly $70 and $1,400 through partners like ZestMoney, after reporting that it scanned phones for lifestyle signals such as divorces or promotions to build credit scores. The monetization math was already hostile: India's Unified Payments Interface had eliminated most transaction fees, forcing payment apps to hunt for other revenue.
The quiet shutdown lands mid-retreat. Xiaomi's mover advantage in India had been eroding on declining shipments, a tax investigation, and top-level departures, and the company has since gone further, agreeing to replace its own GetApps store with PhonePe's Indus Appstore on new and existing phones.
First-order effects
- Indian users lose Xiaomi's native payments and lending apps, and lending partners like ZestMoney lose a distribution channel they joined in 2019.
- Xiaomi exits two consumer-facing services it had spent three years operating in its second-largest smartphone market, concentrating its remaining India presence on hardware sales.
Second-order effects
- PhonePe consolidates its grip on Xiaomi's India touchpoints: with GetApps already slated for replacement by Indus Appstore, Xiaomi's software surface is being handed to a local rival rather than rebuilt.
- Rival fintech lenders and payment apps inherit abandoned users in a market where zero-fee UPI already forced players like Paytm to search for non-transaction income, tightening competition for lending margins instead.
Third-order effects
- The pattern points to Chinese smartphone makers in India shrinking from data-rich services businesses toward pure hardware distribution, as geopolitical scrutiny and regulatory pressure make on-device financial services harder to defend.
- If free UPI keeps stripping payments economics while local players absorb OEM software surfaces, device-maker fintech in India becomes structurally unviable — services strategy gives way to whatever distribution deals local platforms will offer.
The trend: Smartphone makers are abandoning first-party financial services in India as zero-fee UPI erodes payments economics and geopolitical pressure pushes them back toward hardware.