NPCI to counter PhonePe & Google's dominance in UPI payment space

National Payments Corporation of India (NPCI) is planning strategic discussions with various fintech startups. The aim is to counterbalance the growing market dominance of PhonePe and Google Pay.

This move comes in the wake of concerns raised by legislators and industry insiders about the concentrated market share of these two platforms, which together account for nearly 86% of UPI transactions by volume.

It is reported that NPCI is planning to meet executives from companies like CRED, Flipkart, Fampay, and Amazon to discuss key initiatives aimed at boosting UPI transactions on their respective apps.

It is trying to understand the assistance required by the companies to increase their market share in the country where online payments are dominated by players like Google Pay and PhonePe.

The NPCI has always been in favour of limiting the market share of individual companies to 30% that are involved in the UPI ecosystem. However, the deadline for firms to comply with its directive has been shifted to December 2024.

It is also reported that the NPCI is aiming to assist new fintech companies so that they can offer incentives to their users, promoting the use of their respective apps for making UPI transactions.

The RBI is also mulling an incentive plan to create a more favourable competitive field for emerging UPI players in the country.