The National Payments Corporation of India (NPCI), the government agency that manages the Unified Payments Interface (UPI), has reportedly held a meeting to discuss ways to empower new players in the UPI ecosystem.
According to a report in Economic Times, several new third-party payment apps on UPI are being promoted by NPCI to attract investments and encourage consumers.
Current companies like Cred, Slice, Fampay, Zomato, Groww and Flipkart are reportedly trying to attract users and adapt them to their integrated UPI services.
It is worth mentioning that major companies like Google Pay, PhonePe and Paytm were not invited to this conference. Reason: These three companies control more than 90% of UPI transaction volume and transaction value. The NPCI aims to gather insights from stakeholders on how to level the playing field for small third-party application (TPAP) providers, sources said.
PhonePe and Google Pay were the market leaders, but the recent turmoil at Paytm (following a central bank order asking the company to suspend payment banking services) has made users focus even more on Ta’s top two apps.
What new UPI players want
According to an ET report, participants at the meeting supported an incentive program similar to the government’s Zero Commercial Discount Rate (MDR) program for RuPay cards. This system offers benefits to merchants who accept RuPay payments, giving them a competitive edge over other cards. Similarly, participants suggested incentive structures to encourage users to adopt UPI platforms offered by small businesses.
Concerns raised by the new UP players
Another concern was the dominance of PhonePe, Google Pay and Paytm in the app interfaces. Many merchant apps and websites prioritize these three platforms during checkout and separate other UPI options into a general “Other UPI Apps” category. NPCI has reportedly clarified that merchants will have the ability to choose how UPI options are displayed.
The topic of brand awareness was also addressed at this conference. Smaller players have reportedly requested more promotional support from NPCI to increase their visibility. Additionally, NPCI urged these platforms to consider cashback programs to attract customers.
While the discussions aimed to address the dominance of large players, the report said no clear solutions were found on how to mitigate the risks of concentration in the UPI ecosystem. The current deadline to implement the 30 percent cap on UPI transactions is by the end of this year.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.
