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Why is NPCI upset with PhonePe, Google Pay, Why are new UPI apps being launched?

UPI payments have now become a part of everyone's life. We all know about Google Pay, Phone Pay, but recently many new UPI apps have hit the market. What is the reason behind this finally?
1 Month ago

Paying through PhonePe, Google Pay or Paytm UPI is quite common these days. We can't imagine our daily routine without it, but is the National Payments Corporation of India (NPCI), which provides UPI payment services, now upset with these companies? If not then why new UPI payment apps are being launched in the market every day.

Will the new app be launched?

Actually these new UPI apps are launched by NPCI itself. So that customers can benefit from new level of discount. Not only this, NPCI also wants new investment in the UPI segment. There is a special reason behind it.

85% of transactions are done through Google Pay and PhonePe

NPCI wants people to shift to these new apps. Take advantage of this. So that risks of excessive transactions on PhonePe and Google Pay can be reduced. Currently around 85 percent of the total UPI transactions take place on these two platforms. Despite being the largest company in the digital payments space, Paytm is lagging behind in this regard.

Citing people in the know, ET also reported that NPCI is constantly engaging with new UPI players and holding regular discussions with them. Last month too, NPCI held a meeting with new UPI app companies and Google Pay, PhonePe and Paytm were not invited.

These new players have come into the market

If you look at recent events, many new UPI platforms like Cred, Slice and FamPay have come into the market. Zomato, Grow and Flipkart have also been licensed to operate UPI payment services. All these apps are giving customers new offers, cashback and discounts for making UPI payments.

However, these companies have clarified that they are not in a mood to invest heavily on this platform to add new UPI users. However Cred is offering good cashback in this segment. Apart from this, an ad campaign is also being run.

The share of Google Pay and PhonePay is increasing

If we look at the March data, the transaction volume of PhonePe and Google Pay has increased. PhonePe grew at 5.2 percent and Google Pay at 6.3 percent. But this is the first time, when the company's data has grown in single digits.

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