Archive · 30 Oct 2025
Fintech Foundation Urges RBI, Ministry to Address UPI Concentration Risk
Imagine a popular game where only two players are really good and most people play with them.
The India Fintech Foundation is like a coach telling the game organizers (the RBI and Ministry of Finance) that this isn't fair.
They say these two big players control almost all the game's actions, making it hard for new players to join and stop them from being too bossy.
The foundation wants the organizers to change the rules so everyone gets a fair chance.
They suggest making it easier for players to switch between different game leaders and to share the rewards more evenly.
This way, more people can enjoy the game, and it stays exciting for everyone.
India Fintech Foundation (IFF) alerted the Finance Ministry and RBI about concentration risk in UPI.
Two Third-Party Application Providers (TPAPs) dominate UPI, handling over 80% of transactions.
IFF claims this duopoly leads to unfair competition, high entry barriers, and reduced innovation.
Recommendations include implementing data portability and reforming the UPI incentive structure.
The foundation aims to foster a more competitive and inclusive UPI ecosystem.
- Who
- India Fintech Foundation (IFF)
- What
- Submitted policy recommendations to mitigate concentration risk in the UPI ecosystem
- When
- Thursday
- Where
- India
- Why
- To address concerns about market dominance by two TPAPs, leading to predatory pricing, entry barriers, and stifled innovation
IFF's Concerns
Existing/Proposed Measures
Market Dominance
IFF's Concerns
Two TPAPs control over 80% of UPI transactions, leading to predatory pricing, entry barriers, and stifled innovation.
Existing/Proposed Measures
RBI and NPCI are aware and have proposed measures like a 30% volume cap on TPAPs.
Incentive Mechanism
IFF's Concerns
The current UPI incentive system benefits dominant TPAPs; proposed reform to redirect incentives towards smaller challengers.
Existing/Proposed Measures
The delay in enforcing the 30% cap allows dominant players to grow larger, potentially becoming 'too big to fail'.
Competition and Innovation
IFF's Concerns
Market dynamics have eroded the market share of state-led platforms like BHIM.
Existing/Proposed Measures
Implementation of data portability inspired by Account Aggregator framework is proposed to empower smaller TPAPs.
- Organization
- India Fintech Foundation (IFF)
- Regulators Urged
- Reserve Bank of India (RBI), Ministry of Finance
- Key Issue
- Dominance of two Third-Party Application Providers (TPAPs) in UPI
- Market Share Concern
- Two TPAPs control over 80% of UPI transactions
- Proposed Solutions
- Data portability, reformed incentive mechanism