A coalition of smaller UPI-based payment applications has formally requested that the National Payments Corporation of India (NPCI) re-evaluate its planned UPI Meta architecture.
The proposed framework is designed to let users choose a preferred UPI app for merchant checkouts, allowing payments without opening the application during every transaction.
Smaller providers argue that the initiative could strengthen the position of dominant players while limiting competition within India’s digital payments ecosystem.
Concerns Regarding UPI Meta and Market Concentration
Under the proposal, users would be able to bookmark a preferred payment application on e-commerce platforms such as Amazon, Swiggy, and Blinkit. Once configured, payments could be completed using biometric authentication or a UPI PIN without opening the selected payment application.
According to the petitioning companies, this approach could create a long-term advantage for industry leaders such as PhonePe and Google Pay, which currently account for approximately 45% and 33% of total UPI transaction volume, respectively. In contrast, smaller platforms such as Navi, super.money, and BHIM account for a combined market share of only 1% to 2%.
The petitioning companies suggest that allowing users to select a default app only once could lock consumers into a single provider, making it increasingly difficult for smaller apps to acquire new users. They maintain that the current UPI checkout process is already efficient and that there is no data indicating that customers are abandoning transactions due to the existing user experience.
Competition, Security and Technical Concerns
In addition to competition concerns, the group has raised issues related to security, governance, and operational complexity. The firms warn that synchronizing consumer preferences across banks, retailers, and payment apps could introduce new technical vulnerabilities. Furthermore, they caution that bypassing the standard payment app interface might limit access to critical features, including:
- Account balance inquiries
- Issuer bank health indicators
- Integrated fraud control mechanisms
- UPI Lite and credit-based payment services
The payment providers have urged the NPCI to conduct broader industry consultations before moving forward with the framework. They have specifically requested an investigation into alternative solutions that could reduce transaction friction without compromising interoperability or consumer choice.
The outcome of the discussions could shape how India’s UPI ecosystem balances payment convenience, innovation, and competition among payment providers.
