Fintech body flags UPI dominance by American firms, seeks fair competition
&imwidth=600&imheight=450&format=webp&quality=medium "Fintech body flags UPI dominance by American firms, seeks fair competition")
IFF has proposed a 10% cap on UPI incentive payouts for banks supporting any single TPAP. Photograph: (Imagined by AI)
UPI in India: The industry body, in its letter, said that the current structure can stifle innovation and competition over time.
India Fintech Foundation, an industry body, has warned the Finance Ministry that over 80 per cent ofUnified Payments Interface (UPI) transaction volumes are currently handled by just two third-party app providers (TPAPs).
It has urged thegovernment to initiatepolicy intervention to prevent systemic concentration and ensure fair competition within UPI.
The industrybody, in its letter, said that the current structure canstifle innovation and competition over time. It said that the government should take corrective steps to create a level playing field. It also urged the government to sustaindiversity within the ecosystem.
IFF has proposed a 10% cap on UPI incentive payouts for banks supporting any single TPAP, thereby encouraging them to partner with multiple providers instead of depending disproportionately on dominant apps.
India Fintech Foundation urged the government to restructure UPI andRuPay incentive schemes, supporting emergingfintech players and helping new entrantsin the market.
It asked the government to view the boarderimplications of the current situation of the industry,stressing the need for a strategic and long-term view of India's digital payments infrastructure.
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It said UPI is now a national asset and it must remain resilient, competitive, and inclusive. The group warned that the concentration of market power is against UPI's founding principles of openness, interoperability, and shared innovation.
The IFF's recommendations come amid growing calls to broaden participation within the UPI ecosystem. While a few players currently dominate transaction volumes, major TPAPs such as Paytm, Amazon Pay, and others continue to anchor innovation, drive merchant adoption, and expand use cases across peer-to-peer payments, QR-based commerce, and credit on UPI.