NPCI to Offer Smaller UPI Apps Exclusive Feature Access, Including Autopay Rules

India's National Payments Corporation to Meet Smaller Players in UPI Ecosystem

The National Payments Corporation of India (NPCI) is set to meet smaller players in the Unified Payments Interface (UPI) ecosystem at its Mumbai headquarters on Thursday, April 30, to discuss proposals aimed at boosting competition. The meeting is expected to focus on creating a level playing field between large and emerging third-party app providers (TPAPs), with measures such as relaxed feature parity norms and potential exclusive or early feature rollouts for smaller apps.

The discussions will center on creating a more inclusive environment, where smaller apps can participate and compete with top players like PhonePe and Google Pay. Currently, the UPI payments ecosystem is dominated by these two players, accounting for around 80 percent of the market share, despite a crop of new apps emerging in the last few years. The remaining 20 percent market share is collectively held by around 30-odd apps.

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The NPCI meeting on April 30 is expected to include discussions on targeted incentive programmes for emerging TPAPs, as well as a review of Autopay-related restrictions. Preferential incentives, early access to new features, and a review of Autopay-related restrictions are among the proposals that will be discussed. These measures aim to reduce concentration in the UPI ecosystem and create a more level playing field.

The NPCI has not deployed preferential programmes so far, instead choosing to roll out all new features, like Autopay, UPI Lite, and more, to all participating players at an ecosystem-level. However, as the NPCI attempts to reduce concentration in the UPI ecosystem, it is likely to discuss piloting new features exclusively with smaller UPI apps to draw more users away from top apps and encourage adoption among others.

The NPCI is also expected to take up non-solicitation of AutoPay, with a view to tightening norms around autopay mandates, especially for smaller UPI apps. This comes at a time when a growing number of companies, especially new-age ones, have been relying on autopay mandates as a steady stream of income from customers, primarily the non-active ones.

NPCI did not immediately reply to Moneycontrol's request for comments. It remains to be seen what discussions with the NPCI will translate to final outcomes in the UPI ecosystem.

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