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Will the Rise and Rise of UPI Be Its Downfall?

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26 July 2022
Gareth Lodge

UPI is undoubtedly one of THE most impressive payment launches, ever. Launched in 2016, it now processed over 46 billion transactions in 2022, and is close to surpassing 6 billion transactions a month. Indeed, the projections suggest that a billion transactions a day is possible within the next 3 to 5 years. In context, at current growth rates, that would exceed the combined global volumes of Mastercard and Visa!

The Reserve Bank of India has arguably played a large part in the success, from their aggressive policy decisions in pushing the adoption of electronic payments and financial inclusion. For example, working NCPI, they have launched UPI123Pay which allows more than 400 million mobiles in India without internet access to use UPI.

Yet not every RBI intervention has been as welcome by the industry. While there are more than 50 UPI app’s, just two account for around 81% of transaction volumes, and 84% of transaction value. These are Phone Pe (owned by Walmart) and GooglePay (owned by Google).

The RBI is not happy about this duopoly, which has led the National Payments Council of India to issue guidelines that no processor should have more than 30% market share. These are due to come into effect in January 2023.

But how?

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