Amidst the growing popularity of UPI payments in India and the recent closure of Paytm Payments Bank, there are concerns over the influence foreign UPI payment apps have in the country. We are talking about PhonePe (the major market share holder) and Google Pay which contribute 83% of the total UPI transactions in India. An Indian parliamentary panel has expressed concern over these foreign UPI apps against the home-grown BHIM App reserving a paltry 0.22% of market share.
The 58-page report proposed by the Indian parliamentary body hints at how Google Pay and PhonePe have maintained their duopoly in the Indian UPI payments ecosystem. According to the National Payments Corporation of India (NPCI), no single payments app should have more than 30% of the market share at a time.
Currently, PhonePe, Google Pay, and PayTM have the largest market share in UPI transactions. The recent RBI mandate makes it imperative for PayTM to close its doors for payment processors post-February 29th following failure to comply with regulations. It currently has 47 million merchants registered with PayTM UPI payments which raises concerns since these QR codes could become obsolete.
The report suggests how the monopoly of any app in the payments ecosystem could create chaos and thus, suggests a maximum cap on the market share of any particular payments app. It is something that could hurt the Walmart-backed PhonePe and Google Pay given the fact that these are the leading UPI payment apps in India.
This could incentivize home-grown and government-owned BHIM apps that have a market share of just 0.22% in India. With the potential exit of PayTM and capping on both PhonePe and Google Pay, the BHIM App could offer a breeding ground for merchants and users alike to set up their UPI payments. Currently, BHIM is offering 1% cashback on utility bills and fuel payments as well as up to INR 750 instant cashback on merchants’ UPI payments.
You can follow Smartprix on Twitter, Facebook, Instagram, and Google News. Visit smartprix.com for the most recent news, reviews, and tech guides.
