Smaller UPI apps raise competition concerns over NPCI’s proposed UPI Meta framework

A group of smaller UPI payment apps has urged NPCI to review its proposed UPI Meta framework, arguing that the initiative could alter UPI’s open architecture, strengthen dominant players and reduce competition across India’s digital payments ecosystem.

Several smaller Unified Payments Interface (UPI) applications have urged the National Payments Corporation of India (NPCI) to revisit its proposed UPI Meta framework, expressing concerns that the initiative could disproportionately benefit dominant payment platforms while making it more difficult for emerging players to compete.

According to reports, multiple UPI service providers have jointly submitted a representation to NPCI, questioning both the necessity and the potential impact of the proposed framework. The companies contend that the existing UPI payment flow already offers a smooth user experience and that the new mechanism may alter the platform’s open and interoperable design without delivering significant benefits to consumers.

The report, which reviewed a copy of the representation, said the payment firms have called for broader stakeholder consultations before the framework is introduced.

Industry flags competition and security issues

The proposed UPI Meta framework would allow customers to select and save a preferred UPI application on merchant platforms such as Amazon, Blinkit and Swiggy. Once configured, users could complete future transactions directly through PIN or biometric authentication without being redirected to their chosen payment application.

While the proposal is aimed at simplifying the payment journey, smaller UPI providers argue that it could unintentionally reinforce the market position of leading payment apps. They maintain that there is little evidence to suggest that the current UPI checkout process causes significant transaction abandonment, questioning whether the proposed changes are warranted.

The companies also warned that requiring users to make a one-time app selection could create a lasting advantage for market leaders, limiting opportunities for smaller payment platforms to attract new users and compete on equal terms.

The concerns come against the backdrop of an already concentrated UPI ecosystem, where PhonePe accounts for nearly 45% of transaction volumes and Google Pay contributes around 33%. In comparison, smaller platforms such as Navi, super.money and BHIM each account for only about 1–2% of the market, according to the report.

Call for wider consultations before rollout

Beyond competition-related concerns, the representation reportedly highlights operational and security challenges associated with implementing the framework. The companies said synchronising user preferences across merchants, banks, payment applications and NPCI could add complexity and introduce new risks within India's high-volume digital payments infrastructure.

They further argued that bypassing the existing UPI application interface may prevent customers from accessing several important features currently available during transactions. These include account balance checks, issuer bank status updates, fraud protection mechanisms and newer services such as UPI Lite, Credit Cards on UPI and Credit Lines on UPI.

The group has urged NPCI to engage with industry stakeholders before proceeding with the rollout of UPI Meta. It has also recommended exploring alternative measures to improve payment speed and convenience without compromising competition, user choice or the interoperability that has been central to UPI's rapid adoption across the country.