UPI providers seek intervention to make services financially viable

The UPI payment ecosystem is currently under the sway of two major players – , commanding a substantial 47% market share, and , a subsidiary, holding a significant 37% share. This duopoly underscores the competitive landscape and the uphill battle faced by smaller players.

During the same meeting, representatives from banks conveyed to RBI that their core banking solution (CBS) is well-equipped to handle any increase in UPI transactions.

At the meeting, players also discussed possibilities to make it easier for senior citizens to use UPI service.

Currently, are not imposing any fees on customers, despite incurring customer acquisition costs. Smaller players in the UPI ecosystem have proposed to the banking regulator that they should be permitted to charge a on larger shops. They emphasized the need for a revenue model stating, "It is challenging to expand operations without one." The absence of is not financially viable for small players competing with larger platforms, yet the government discourages charges on UPI transactions.

In a statement issued to the media, RBI stated that the discussion was centred on widening and deepening the adoption and usage of UPI.

The RBI stated that the players discussed strategies for scaling up of UPI infrastructure and expanding products portfolio. They also talked about the challenges the layers encountered and the innovative solutions that can be applied to addressing them. The RBI also sought innovative ideas from UPI players to integrate potential users into the .

In November 2022, proposed a 30% volume cap on third-party app providers by the end of two years. However, smaller are unlikely to scale up by the end of December 2024, when the two-year period ends. Cred, Slice, Fampay, Zomato, Groww, and Flipkart are among India's other 25 UPI service providers.

UPI is an instant real-time payment system developed by the NPCI. It facilitates seamless money transfer from one bank to another via mobile banking through a two-factor authentication process.