India’s governing body overseeing the country’s Unified Payments Interface (UPI) mobile payments system is set to engage with fintech startups to develop a strategy to address the growing market dominance of companies including PhonePe and Google pay in the UPI ecosystem.
The National Payments Corporation of India (NPCI) plans to meet executives from companies including CRED, Flipkart, Fampay, and Amazon to discuss key initiatives aimed at boosting UPI transactions on their respective apps, a report from TechCrunch said.
The NPCI is reportedly looking to understand the assistance companies require to further their market shares in a country where digital online payments are dominated by key players including Google, and PhonePe, that together account for nearly 86% of the UPI transactions by volume. Paytm the third largest UPI player has declined to 9.1% by the end of March, down from 13% at the end of 2023, following clampdown by the Reserve Bank of India (RBI).
The increasing dominance of two key players has reportedly led lawmakers and industry players to express concerns over the market share concentration.
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The NPCI has been an advocate of limiting the market share of individual companies participating in the UPI ecosystem to 30%. However, the deadline for firms to comply with its directive has been shifted to December 2024.
Meanwhile, the NPCI is also looking to assist new fintech companies to offer incentives to their users, promoting the use of their respective apps for making UPI transactions, a report from the Economic Times said.
The RBI is also mulling an incentive plan to create a more favourable competitive field for emerging UPI players in the country.
Earlier this year, in February, a parliamentary panel in India urged the government to support the growth of domestic fintech players in an effort to limit the dominance of Walmart-backed PhonePe and Google’s payments apps in the country.
