Parliamentary panel flags dominance of foreign-owned UPI apps

Flagging the large market share of foreign-owned fintech apps, such as Walmart-owned PhonePe and Google Pay, in the Unified Payments Interface (UPI), the parliamentary standing committee on communications and information technology has recommended the government to promote local apps.

The issue of concentration of the UPI market share has been taken up by the National Payments Corporation of India (NPCI), which has proposed imposing a 30% ceiling on UPI volume share for apps from next year.

ET reported on February 5 that following the Reserve Bank of India’s action against Paytm Payments Bank, the debate on NPCI proposal was reignited.


“The committee notes that fintech companies, apps and platforms such as PhonePe and Google Pay owned by foreign entities dominate the Indian fintech sector,” the house panel said in a report tabled in Parliament Thursday. The UPI market share was 36.39% for Google Pay and 46.91 for PhonePe in terms of transaction volume in October-November 2023, it said.

On February 6, ET reported that PhonePe witnessed an increase of at least 15-20% in its user base over the preceding few days on the back of the ongoing crisis at rival Paytm and panic among consumers about the fate of the UPI accounts issued by Paytm Payments Bank.

The parliamentary committee noted that “regulation of Indian fintech apps would be more feasible” for the Reserve Bank of India and NPCI compared to foreign entities that are present in multiple jurisdictions. It said several fintech companies were also being used for money laundering.

“In this context, the committee recommends that there should be focus on promotion of local Indian players in the fintech universe. Indigenously developed BHIM UPI is a good example of it, however its share in the UPI market is very low,” it said.

As India is focusing on ‘Make in India’, the committee’s opinion is that local entities should be promoted in the fintech sector as well, the report added.