The Unified Payments Interface (UPI) mobile payments system’s regulatory body in India is planning to work with fintech firms to create a plan to counter the growing market domination of businesses like PhonePe and Google Pay in the UPI ecosystem.
A TechCrunch story stated that the National Payments Corporation of India (NPCI) is scheduled to meet with executives from companies such as CRED, Flipkart, Amazon, and Fampay to talk about major projects that will increase UPI transactions on their individual apps.
The National Payments Commission (NPCI) is purportedly seeking to comprehend the support that companies need to expand their market shares in a nation where major participants in digital online payments, such as Google and PhonePe, control almost 86% of the number of UPI transactions.
Due to a crackdown by the Reserve Bank of India (RBI), Paytm, the third-largest UPI participant, dropped from 13% at the end of 2023 to 9.1% by the end of March.
Lawmakers and business leaders are apparently concerned about the concentration of market share due to the dominance of two major players.
Is the NPCI looped in reverse?
A 30% cap on the market share of individual businesses involved in the UPI ecosystem has been supported by the NPCI. Nevertheless, December 2024 has been set as the new deadline for businesses to abide with its requirement.
In the meanwhile, the NPCI is seeking to support emerging fintech businesses by providing rewards to their customers, encouraging the use of their apps for UPI transactions.
In order to improve the competitive environment for newly established UPI companies in the nation, the RBI is also considering the implementation of an incentive scheme.
In an effort to lessen the dominance of Google’s payments apps and Walmart-backed PhonePe in the nation, an Indian parliamentary panel recommended in February of this year that the government encourage the development of indigenous fintech companies.
Read the entry of Flipkart in UPI here: Flipkart enters UPI Arena
