Large tech companies, including Amazon and Meta, plan to raise concerns with the National Payments Corporation of India (NPCI) about the continued dominance of PhonePe and Google Pay on the Unified Payments Interface (UPI), a problem India’s payments authority has been trying—and failing—to address since late 2020, according to a Techcrunch report.
The report further states that executives from Amazon Pay, WhatsApp, CRED, MobiKwik, and Flipkart’s Super.money are expected to meet the NPCI, which runs UPI, to discuss competition issues in the payments network.
The concern is concentration. In March 2026, PhonePe and Google Pay together handled about 80% of UPI’s 22.6 billion transactions. Smaller rivals argue that this scale makes it difficult for them to attract users or compete fairly.
A six-year-old market share debate: The issue, however, is not new. NPCI first introduced a 30% market-share cap for third-party UPI apps in November 2020, saying it wanted to “address the risks and protect the UPI ecosystem.” At the time, the payments body warned that excessive concentration on a few apps could create systemic risks if a major platform faced outages or technical failures.
Under the original plan, apps crossing the 30% threshold were supposed to gradually comply from January 2021 onwards. In March 2021, NPCI issued detailed operational rules stating that companies breaching the cap could face restrictions on onboarding new users, promotional campaigns, and cashback offers.
But they have repeatedly pushed back the deadline.
In June 2022, reports emerged that NPCI was considering giving PhonePe and Google Pay more time, as forcing them to cut market share could disrupt services for users. Later that year, NPCI formally extended the compliance deadline from December 2022 to December 2024, citing the “present usage and future potential of UPI.”
Then, in January 2025, NPCI again extended the deadline, this time to December 31, 2026, giving further relief to PhonePe and Google Pay, which remained far above the proposed cap.
The repeated extensions have allowed PhonePe and Google Pay to dominate UPI. PhonePe said it had crossed 700 million registered users and 50 million merchants, with acceptance across more than 98% of India’s postal codes.
Questions over NPCI’s role and oversight: The repeated extensions have also revived larger questions around NPCI’s role in the payments ecosystem. In a February 2025 column, MediaNama founder Nikhil Pahwa wrote that NPCI continues to operate as “a largely opaque quasi-regulator, a platform and a competitor” because it controls the UPI infrastructure while also running BHIM, its own payments app.
The piece also raised concerns about market concentration. As of early 2025, PhonePe handled about 48% of UPI transactions while Google Pay accounted for around 37%, leaving smaller apps with limited room to grow despite years of regulatory discussions around market balance.
The debate has also exposed mixed regulatory messaging. RBI Deputy Governor T Rabi Sankar had earlier said, “It will be for the market to decide. The market forces have to play out such that this percentage is more evenly divided. We will not be interfering in the market process to ensure the 30% cap.”
At the same time, RBI policy documents and parliamentary committees have repeatedly raised concerns about the dominance of large players in digital payments and called for greater participation by domestic and smaller firms.
Revenue model concerns add pressure: The dominance debate is also unfolding alongside wider concerns about the financial sustainability of the UPI ecosystem. In March, a Parliamentary Standing Committee on Finance backed the return of Merchant Discount Rate (MDR) on UPI transactions, saying “the sustained expansion of UPI requires a viable revenue mechanism.”
The committee noted that while zero MDR helped accelerate digital payments adoption, the model has created funding pressures for banks and payment firms that continue to bear infrastructure and operational costs without a direct revenue stream.
According to the meeting agenda reviewed by TechCrunch, smaller players are expected to raise concerns about user acquisition, product design, the use of contact data, and access to features such as autopay and payment mandates. They are also seeking incentives and regulatory support to grow.
It remains unclear whether the latest meeting will lead to any action or further delay.
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