Tatas to get enlisted in the UPI payment club with their own app

Tata is seeking clearance from National Payments Corporation of India (NPCI) to start operating on the Unified Payments Interface (UPI) as a third-party payments service provider offering digital payments services.

The Tata Group, through its digital commerce unit Tata Digital, is in talks with private lender ICICI Bank to power its UPI infrastructure. It has also held discussions with another leading private sector lender as an additional banking partner.

Non-banking platforms such as PhonePe and Google Pay have to partner with banks to get access to UPI railroads. Owing to the technology-focused approach to serve consumers better, non-banking apps have fared better on UPI, cornering most of the market share. For instance, PhonePe and GooglePay have the lion's share of UPI transactions each month while Amazon Pay, Paytm and Facebook-owned WhatsApp Pay are the other prominent apps.

UPI apps, especially when they are dealing with large transaction volumes, opt to work with multiple banks to share the load. For instance, GooglePay offers UPI through State Bank of India, HDFC Bank and ICICI Bank.

This will add an additional dimension to the much debated market share cap issue of UPI. NPCI has mandated new players cannot process more than 30% of the total transaction volumes of UPI during the preceding three months by a single player. However, existing players such as PhonePe and Google Pay were given time until the end of 2022 to comply with the order.