NPCI to meet smaller UPI players today, market-share cap proposal to be discussed

NPCI runs UPI

The National Payments Corporation of India (NPCI) is meeting smaller UPI players and some banks on March 5 to discuss the 30 percent market share cap for a single-app in the digital payments ecosystem, as it looks to broad-base the system .

NPCI runs the UPI platform, which controls 80 percent of the digital payments in the country. Big players such as PhonePe, Google Pay and Paytm together account for almost 95 percent of the UPI transaction value and volume.

"The meeting is expected to ask everyone for ideas and proposals on how to control the market share without disrupting the payments ecosystem," a fintech participant, who did not wish to be identified, told Moneycontrol.

The smaller apps in the ecosystem are BHIM, run by NPCI, various bank apps, Amazon Pay, Cred, Jupiter and Slice among others.

The meeting is scheduled for evening and some of the participants were told in the morning that a virtual link would be sent for them to join the meeting.

"Even when I asked yesterday evening, I was told that there is no such meeting. Today morning, suddenly they said that there will be a meeting to discuss market share and I still have not received the meeting invitation," head of digital banking at a private bank told Moneycontrol on condition of anonymity.

PhonePe has around 47 percent market share, while Google Pay has 36.4 percent market share. As reported by Moneycontrol , Paytm's share fell to 11 percent in February as its banking arm battles a regulatory crisis.

There is a fear that if Paytm's market share drops even further because of the Paytm Payments Bank crisis, the top two players will increase market share and create a dupoply in the market.

NPCI had set end of 2022 as the deadline to cap the market share of a single player at 30 percent but extended it to 2024.

The deadline had to be extended as it would created confusion for end-users as the existing players would have been stopped from onboarding new customers. It would also have forced platforms to stop customers from carrying out more transactions.

Recently, a parliamentary panel had flagged PhonePe's and Google Pay’s dominance of the UPI market, both of which are majority-owned by US companies.