Apps dominate UPI payments
Unified Payments Interface (UPI), which is changing the face of digital payments in India, is being used in every street today. But now a big alert has come from the fintech sector. According to a report by Moneycontrol, industry body India Fintech Foundation (IFF) has written a letter to the government and the Reserve Bank of India (RBI) warning that the risk of concentration in the country's digital payment system is increasing.
According to IFF, today, more than 80% of all digital transactions through UPI in India are being done through only two Third Party App Providers (TPAPs), i.e. major mobile payment apps. This means that if for some reason the services of any one of these two apps are disrupted, the entire UPI system may be affected.
IFF said in its letter dated October 29, 2025 that UPI is currently facing serious concentration risk. In such a situation, to keep the digital payment structure of the country strong, it is necessary that competition increases and other apps also get equal opportunities. This letter has been sent to both the Finance Ministry and RBI.
According to data from the National Payments Corporation (NPCI), there were 19.63 billion transactions through UPI in September 2025, with a total value of about ₹24.90 lakh crore. In August 2025, this number had crossed 20 billion. This shows how fast digital transactions have grown in India, but also that the majority of them are controlled by a few select companies.
IFF has suggested in its letter that the government, RBI and NPCI together make changes in the UPI incentive policy. With this, more encouragement can be given to small and new TPAPs, so that competition remains in the UPI market and the situation of monopoly ends.
Concentration risk means excessive dependence of a system on a few players. In the case of UPI, if only two apps are handling 80% of the business, then in case of any technical glitch, cyber attack or policy dispute, the entire country's payment network can come to a standstill. This situation can be harmful for both the economy and the common people.
