Smaller UPI apps oppose NPCI’s Meta proposal over competition concerns

MUMBAI: The battle for India’s checkout screen is heating up before the payment is even made. Smaller Unified Payments Interface (UPI) apps have urged the National Payments Corporation of India (NPCI) to rethink its proposed UPI Meta framework, warning that the move could tilt the competitive balance further in favour of market leaders PhonePe and Google Pay.

According to a Moneycontrol report, a group of UPI payment apps has submitted a joint representation to NPCI, arguing that the proposed framework alters UPI’s open architecture without delivering a meaningful improvement in customer experience.

The proposed UPI Meta framework would allow users to save their preferred UPI application on merchant platforms such as Amazon, Blinkit and Swiggy. Once selected, payments could be completed using a UPI PIN or biometric authentication without opening the payment application itself.

The companies contend that the existing UPI journey is already fast and efficient, with no evidence to suggest that users are abandoning transactions because of the current checkout process.

Their primary concern is that allowing users to make a one-time app selection could create a lasting advantage for dominant players. Once a preferred app is chosen, they argue, consumers may have little incentive to switch, making it increasingly difficult for smaller payment apps to attract new users.

The concern comes against the backdrop of an already concentrated market. According to the report, PhonePe accounts for around 45 per cent of UPI transaction volume, while Google Pay holds approximately 33 per cent. In comparison, smaller platforms such as Navi, super.money and BHIM each account for roughly 1-2 per cent of the market.

Beyond competition, the representation also flags concerns around security, governance and operational complexity. Synchronising customer preferences across payment applications, banks, merchants and NPCI at UPI’s scale, the companies argue, could introduce additional technical and security risks.

The firms have also warned that bypassing the existing UPI checkout interface would remove access to several consumer-facing features, including account balance checks, issuer bank health indicators, built-in fraud controls, and newer services such as UPI Lite, Credit Cards on UPI and Credit Lines on UPI.

The payment companies have urged NPCI to conduct broader industry consultations before implementing the framework and explore alternative ways to reduce checkout friction without compromising competition, interoperability or consumer choice.

The debate underscores a broader challenge for India’s digital payments ecosystem: balancing faster and more seamless transactions with preserving the open, competitive architecture that has helped make UPI one of the world’s largest real-time payment networks.