Will NPCI Address Market Share Concerns In UPI Meeting?

The National Payments Corporation of India (NPCI) is set to meet smaller players in the Unified Payments Interface (UPI) ecosystem at its Mumbai headquarters on Thursday, April 30, to discuss proposals aimed at boosting competition, including preferential incentives, early access to new features, and a review of Autopay-related restrictions, people familiar with the developments told Moneycontrol.

The discussions will focus on creating a level playing field between large and emerging third-party app providers (TPAPs), with measures such as relaxed feature parity norms and potential exclusive or early feature rollouts for smaller apps to broaden participation beyond the top players such as PhonePe and Google Pay.

Some of the additional demands may also include limiting collect requests unless they are paired with wider merchant-side participation, as well as placing restrictions on autopay mandates to prevent dominance of recurring payment flows.

Meanwhile, the industry executives would also be urging for tighter rules around monetisation, where payment aggregators and gateways will be prohibited from charging on tokenised UPI checkouts.

The discussions come amid a long standing industry demand for implementing a cap of 30% market share in the UPI segment. The demand, which has been outstanding for years, was first proposed by the NPCI in November 2020. The deadline of the market cap implementation has since been extended from December 2022 to December 2024.

While the demand is yet to be implemented, PhonePe has asserted a near 50% hold on the total UPI market. Earlier today, PhonePe announced that it has crossed 70 Cr registered users. 

Meanwhile, the UPI transactions processed across India are growing month on month. In the month of March, UPI transactions touched an all-time-high at 2,264 Cr in March, where the value of the transactions stood at ₹29.53 Lakh Cr. 

The NPCI along with the RBI and the central government are focussing on ways to boost digital transactions in the country, with UPI at the prime focus. During the Union Budget 2026-27, the Centre allocated ₹2,000 Cr under the incentive scheme for promotion of RuPay debit cards and low-value BHIM-UPI transactions of up to ₹2,000 for 2026-27.

In November last year, the NPCI began piloting an agentic AI framework for UPI, partnering with Gemini, BigBasket, Google Pay, and Razorpay.

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