SUMMARY
The initiative primarily aims to encourage users to conduct transactions through these new platforms
Senior NPCI executives are maintaining frequent communication with the leadership of new UPI players to discuss the offers they are running for the week on UPI
New entrants such as Cred, Slice, Fampay, Zomato, Groww, and Flipkart are aiming to acquire users
The National Payments Corporation of India (NPCI) has started nudging several new third-party payment apps on Unified Payments Interface (UPI) to invest and incentivise consumers.
The move is aimed at encouraging users to transact through these new platforms in a bid to mitigate the risk from the high concentration of transactions on PhonePe and Google Pay platforms, ET reported.
Senior NPCI executives are in talks with the leadership of new players to discuss the offers they are running for the week on UPI.
New entrants such as Cred, Slice, Fampay, Zomato, Groww and Flipkart are aiming to acquire users and encourage them to adopt their in-house UPI services. However, offering small incentives to users may not significantly impact UPI market share.
“We are getting calls pretty much regularly because the growth of UPI is also a priority. But as discussed in a recent meeting with NPCI, running small offers won’t do much. Players also need to be incentivised and one needs clarity on the market share deadline before committing significant capital,” the report said, quoting a senior executive at one of the firms.
The new UPI apps are seeking clarity on the regulator’s stance regarding the December deadline on market share and whether it will be extended. Smaller players are hesitant to invest significant capital in UPI to acquire users until there is clarity on the deadline.
As per the December deadline set by NPCI, no single player can have a market share of more than 30%. Back in 2022, NPCI extended the deadline for UPI players to adhere to a market cap of 30% by two years to December 31, 2024.
Meanwhile, Amazon Pay is working with the NPCI to roll out credit services to customers through the UPI.
The transactions on the UPI rose 11% month-on-month (MoM) to 13.44 Bn in March 2024 from 12.10 Bn. On a year-on-year (YoY) basis, the transaction count surged 55% from 8.7 Bn.
Paytm’s UPI transactions saw a marginal drop in March, and it processed around 1.2 Bn UPI transactions in March, a slight decline from 1.3 Bn transactions in February and 1.4 Bn in January.
On the other hand, PhonePe and Google Pay, experienced an increase in transaction volumes.
