After a year since PayU announced the acquisition of payment gateway provider BillDesk for $4.7 billion, the Competition Commission of India (CCI) has finally allowed one of the largest deals in the fintech space.

The CCI confirmed this news through a tweet. It said: “Commission approves the 100 per cent of equity share capital of Indiaideas.com (BillDesk) by PayU Payments.”

The antitrust watchdog had been scrutinising the deal since it was announced on August 31 last year; many industry players and competitors had expressed concern that the PayU-BillDesk merger could lead to a potential monopoly in the segment.

Earlier this year, the CCI issued a show cause notice to Prosus-backed PayU in a bid to ensure that the acquisition did not impact competition. The 30-page notice from the watchdog, sent at the end of July, sought a detailed explanation from PayU as to why a ‘Phase-II’ investigation into the proposed deal should not be launched.

A Phase-II investigation is a thorough exercise that can lead to remedies involving modifications in the deal structure to ensure the combined entity does not adversely affect competition in the market. As the nomenclature suggests, this is the stage after the Phase-I investigation, which leads to the CCI’s approval if it concludes that the transaction is not likely to cause an “appreciable adverse effect on competition”.

BillDesk, founded in 2000, is an Indian success story and one of the leading payment businesses in the country. The company — founded by M N Srinivasu, Karthik Ganapathy, and Ajay Kaushal — is the largest and oldest player in the B2B2C payment space, and also one which has been profitable.

“This acquisition (BillDesk) refocuses our strategy in India. If you look at the businesses of PayU and BillDesk, they are complementary. We believe that the digital payments segment will grow by a factor of 10 over the next few years. Payments and fintech is a core segment for Prosus and India remains our number 1 investment destination,” said Bob van Dijk, group CEO of Prosus at the time of the acquisition.