Smaller UPI Apps Demand Reservation, Incentives To Fight PhonePe, Google Pay


Rohit Kulkarni

Rohit Kulkarni

Mar 08, 2024


In a recent meeting with National Payments Corporation of India (NPCI), relatively smaller digital payment companies have requested the intervention of the organization in order to curb and address the dominance of major players like PhonePe, Google Pay, and Paytm in the UPI payments sector.

Smaller UPI Apps Demand Reservation, Incentives To Fight PhonePe, Google Pay

Strategies Discussed to Empower Smaller Players in India’s UPI Market

The 80 minutes long meeting saw various suggestions like reservation system as well as specialized incentives for smaller players in order to mitigate concentration risks.

While the major players were not invited to the meeting, the attendees included the likes of Amazon Pay, Jupiter, Navi Technologies, Bajaj Pay, slice, Tata Neu. 90% of entire UPI market in India is collectively controlled and dominated by PhonePe, Google Pay, and Paytm.

In order to aid smaller UPI players in the market, there was a suggestion for a scheme similar to zero merchant discount rate (MDR).

The concerns over financial muscle and technical advantages of market leaders was also discussed in the meeting. Smaller players are not being able to differentiate themselves due to the aforementioned reasons. They also highlighted their limited marketing budgets and also urged for longer timelines in order to implement new features.

India’s UPI Ecosystem – Navigating Challenges and Uncertainties

Some of the attendees also brought into attention that merchants only display the logos of major players and bucket all the remaining into “other UPI apps.”

For this concern, NPCI had responded that the placement of UPI apps shall remain in the hands of merchants.

Give the significant investments in expanding UPI use-cases, NPCI’s ability to impose restrictions on major players was also questioned.

Till the month of December, NPCI plans to hold monthly meetings with the smaller players.

Recently, RBI had decided to remove PayTm from the UPI list citing breach of compliance with regulatory norms. This has raised eyebrows as well as concerns over India becoming a duopoly in UPI space due to PhonePe and Google Pay.

Notably, the dominance of foreign owned companies in the UPI space was also highlighted in one of the parliamentary panel.

Which measures are taken or which policies are devised in favour of smaller UPI players is yet to be seen, hopefully it is not a long row to hoe..But all we can do right now, is wait… Until then…


Rohit Kulkarni
Rohit Kulkarni
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