India’s digital payments industry is pushing back against a proposal that could change the way millions of people pay online. Major fintech companies have reportedly urged the National Payments Corporation of India (NPCI) to reconsider a new framework that would let shoppers save their preferred Unified Payments Interface (UPI) option for faster, one-click checkouts. While the idea promises greater convenience, some payment firms argue it could make it even harder for smaller players to compete with dominant apps such as PhonePe and Google Pay. Here’s everything you need to know about the proposal and why it has sparked opposition.
Why Fintech Firms Are Worried
According to a Reuters report, companies including Paytm, Meta-backed CRED and Flipkart’s Super.money have written to the NPCI, warning that the proposed framework could have unintended consequences for competition.
The proposal, referred to as UPI Meta or UPI Checkout, would allow merchants to store a customer’s preferred UPI handle or linked bank account. Instead of choosing a payment app every time they make a purchase, users would simply authenticate the transaction using a PIN or biometric verification.
In the letter, reviewed by Reuters, the companies argued that the proposal could “adversely impact” competition.
They also warned that “The proposed framework is expected to materially increase persistence of customer preference towards the (third party apps) selected during the initial setup process,” suggesting that users would be less likely to switch to competing payment apps once a default option has been saved.
Market Concentration Remains A Key Concern
The issue comes at a time when India’s UPI ecosystem continues to expand at a remarkable pace. According to NPCI data, the platform processed more than 227 billion transactions worth over Rs. 28 trillion in June alone, making it one of the world’s largest real-time payment networks. As reported by Reuters, PhonePe and Google Pay together account for roughly 80 percent of all UPI transactions.
That dominance is exactly what some fintech firms fear could become even stronger under the proposed checkout system. If customers rarely change their saved payment preference, newer or smaller apps may struggle to attract users, even if they offer better features or incentives.