NPCI wants to make UPI payments as slick as a saved card — but a quiet rebellion from smaller apps reveals a structural tension that could decide who controls India's payments future.
Picture the checkout page on Swiggy. You've picked your dinner. You hit "Pay." Right now, Swiggy bounces you over to PhonePe or Google Pay, you confirm with your PIN, and you're done — a two-second detour that most people barely notice anymore.
Now imagine Swiggy never bounces you anywhere. It already knows your UPI app. It goes straight to your PIN prompt. No redirect, no app choice, no waiting. Dinner ordered.
That, in essence, is UPI Meta — a quiet but consequential upgrade that India's payments infrastructure body, the NPCI (National Payments Corporation of India), is preparing to launch. The official motivation is to make UPI smoother and more competitive. But a group of smaller UPI apps has written a joint letter to NPCI arguing that this "upgrade" could, unintentionally, lock India's payments market into a duopoly tighter than anything that exists today.
To understand why NPCI is in a hurry, you need to know what is threatening UPI's advantage in the first place.
UPI processed 24,162 crore transactions worth ₹314 lakh crore in FY2025-26, up 30% in volume from the previous year. December 2025 alone recorded 21.63 billion transactions — the highest monthly volume in UPI's decade-long journey. India now handles around 49% of global real-time payment transaction volume — roughly one in every two instant payments on the planet runs through UPI.
But here's the thing: most of that dominance is in offline payments — your neighbourhood kirana, the auto-rickshaw, the chai stall with a QR code. For online shopping — Amazon, Blinkit, Swiggy — UPI has a friction problem that cards are quietly exploiting.
NPCI is increasingly concerned that tokenised credit cards, combined with biometric authentication and one-click checkout systems, are reducing UPI's speed advantage in online transactions. Here is what tokenisation means for cards, in plain English: when you save your credit card on Amazon, Amazon does not actually store your card number. It stores a unique digital stand-in — a "token" — so next time you shop, it is just one tap, one fingerprint, done. Since cards are already securely stored on merchant platforms, users do not need to repeatedly enter CVV details while making payments.
Several banks have launched biometrics for card payments; card payments are now as fast as UPI, and the rewards structure and offers are often better than UPI — which is likely to entrench cards as the preferred method for high-value online payments.
And then there is the Apple Pay factor. NPCI's urgency has risen ahead of Apple Pay's expected India launch, with industry executives believing that affluent UPI users could increasingly shift towards card-linked payment ecosystems. Industry reports place the likely launch window in 2026, with Apple Pay expected to debut through card-based NFC tap-to-pay, with UPI support expected in a later phase. Globally, Apple Pay is known for its tightly integrated ecosystem that combines tokenised cards with biometric authentication, and industry executives believe the platform could attract affluent users who already prefer premium devices and credit cards for online spending.
That is NPCI's nightmare scenario: well-heeled Indian consumers — the ones with the highest spending power — drifting towards Apple Pay's seamless card experience, and never looking back.
NPCI is accelerating the rollout of UPI Meta, also referred to internally as UPI Checkout, to make online UPI payments faster and more seamless on e-commerce platforms. UPI Meta will allow customers to save their preferred UPI handle or account on merchant applications such as Amazon, Blinkit and Swiggy, and use it as the default payment method. With the feature enabled, users move directly to their UPI PIN or biometric authentication after tapping "Buy" — no app redirect, no fresh choice of payment method.
Think of it as doing for UPI what card-on-file did for Visa and Mastercard. Instead of being routed to PhonePe or Google Pay at every checkout, your chosen UPI app gets "saved" on the merchant's platform. The merchant pings your bank directly; you just authenticate.
NPCI is aiming to unveil UPI Meta at the Global Fintech Fest in Mumbai, which is typically held in September. Before it can launch, NPCI will need clearance from the Reserve Bank of India (RBI). The goal, as NPCI frames it, is to make online UPI as seamless as scanning a QR code offline. On paper, a straightforward competitive response. So why are smaller apps alarmed?
The protest comes from a clutch of smaller TPAPs — Third-Party Application Providers, the regulatory term for apps like PhonePe, Google Pay, Navi, super.money, and BHIM that sit on top of the UPI rails and handle the actual consumer interface.
Smaller UPI applications have formally opposed UPI Meta, warning it could further cement the dominance of larger apps — and arguing the framework lacks "compelling customer benefits to justify the significant ecosystem, competitive, operational, and architectural implications associated with its implementation."
Their logic is precise. Currently, every time you pay via UPI on Swiggy, you actively pick your app. Under UPI Meta, you make that choice once — at onboarding — and then the default sticks. The concern is not about the checkout experience itself. Tokenised credit cards, paired with biometric authentication and one-click checkout, have narrowed the advantage UPI holds in online payments — but UPI itself was never broken. Smaller apps contend there is no evidence of users abandoning mid-payment because of the current UPI flow.
And here is where market data makes the concern very concrete.
Source: NPCI data, May 2026
PhonePe held a 46.2% share and Google Pay 32.7% as of May 2026 — a combined ~79%. That figure actually represents a slight easing of concentration: PhonePe and Google Pay's combined share slipped below 80% for the first time in May 2026, as BHIM, Navi, and super.money gained ground. Still, the gap between the top two and everyone else is vast. In March 2026, PhonePe alone processed 10.50 billion UPI transactions — approximately 46.4% of total UPI volume — becoming the first payments app in India to cross 10 billion monthly transactions.
When UPI Meta launches, users will be prompted to pick a default app — and this is where installed base and brand familiarity become everything. PhonePe and Google Pay will almost certainly be the default for most Indians. And defaults, once set, are almost never changed. This is not cynicism — it is one of the most robust findings in behavioural economics. Whether it is pension fund allocations or phone settings, people stick with what was pre-selected. Smaller apps fear that UPI Meta converts what is currently a daily active competition for each transaction into a one-time race that the incumbents have already won.
It is also worth noting that the rebellion is broader than a few fringe apps. Amazon and Meta are among the participants expected to raise concerns about user acquisition practices, product design, and monetisation within the UPI ecosystem. The discussions have focused on three main areas: preferential incentives for smaller TPAPs, early access to new UPI features before they are rolled out to dominant platforms, and a review of autopay-related restrictions that have hampered smaller apps. When Amazon Pay and WhatsApp Pay — hardly minnows — are sitting in the same camp as Navi and super.money, the grievance starts to look structural, not just competitive.
Here is the irony at the heart of this story. NPCI knows the concentration problem exists. It introduced a rule in 2020 to fix it: no single third-party app should control more than 30% of all UPI transactions, to ensure fair competition and reduce systemic risk.
The rule has never been enforced. NPCI had announced the 30% market share cap for TPAPs in 2020 to prevent excessive dominance, but its implementation has been deferred until December 2026. The original notification stated the rule would come into effect from January 2021, but there was no clarity on penalties for non-compliance or on how large players were expected to reduce their market shares — and consequently, the deadline had to be extended again. That extension brought it to December 2026, the second postponement.
Google Pay and Walmart-backed PhonePe currently control more than 85% of UPI transactions at their peak — far above the prescribed threshold — and the delay in implementing the cap has effectively allowed them to retain their dominant positions, intensifying concerns among players with smaller shares about their ability to compete.
So NPCI has a rule that says no app should cross 30%, both top apps have been running at roughly 1.5× that limit, and the deadline has been pushed twice. Smaller players are now watching NPCI propose UPI Meta — a feature that could extend those defaults — even as the anti-concentration rule sits unenforced. Industry observers note that the delay has allowed the duopoly to deepen, heightening the need for regulatory recalibration, with fresh pressure on policymakers to act before market concentration becomes entrenched.
It could not be ascertained whether NPCI has formally received the joint letter; NPCI did not immediately respond to a request for comment.
To be fair, NPCI's threat perception is real. Apple Pay is not a phantom. Tokenised credit cards, paired with biometric authentication and one-click checkout, have narrowed the advantage UPI holds in online payments — and credit cards also compete in higher-ticket transactions, especially since the real-time payments system is free of any merchant discount rate.
That last point deserves unpacking. UPI is free for users and merchants — there is no MDR (Merchant Discount Rate), the small percentage fee merchants pay every time a card is swiped. This is why the chai-walla accepts UPI and not Visa. But for premium, high-ticket online purchases — a laptop, a foreign holiday, a designer bag — cards come with rewards, cashback, and EMIs that UPI currently cannot match. If Apple Pay supercharges the premium card experience in India, NPCI has a genuine problem it cannot wish away.
UPI Meta is NPCI's response: if you can save a card, you can save a UPI ID. Level playing field, restored. The question is not whether NPCI's instinct is wrong. It is whether the cure introduces a side effect more damaging than the disease.
The apps have requested NPCI to undertake broader consultation with TPAPs and other ecosystem participants, and comprehensively evaluate the concerns highlighted before progressing with the proposed framework. That is the diplomatic ask. But the deeper question is what a structurally fairer design might look like.
A few possibilities are worth considering:
Rotating or randomised defaults. Instead of a single default UPI app locked in at onboarding, merchants could be required to show a periodic choice prompt — the way browsers in the EU must now show a "choose your default search engine" screen. This preserves frictionlessness while preventing permanent lock-in.
Portability obligations. If a user sets PhonePe as their default on Amazon, competing apps should have a genuine, easy path to surface a "switch" prompt at intervals — preventing the digital equivalent of a utility company that never lets you change providers.
Actually enforcing the 30% cap. The most obvious fix has been sitting on the shelf since 2020. If neither PhonePe nor Google Pay can hold more than 30% of volume by December 2026, UPI Meta's defaults become far less deterministic. But NPCI has postponed this rule twice, and credible reports suggest it may consider raising the cap rather than enforcing it. If that happens, the structural argument for a fair UPI Meta collapses entirely.
UPI was designed as an open architecture — a public rails system that any app can run on, the way any train can run on Indian Railways tracks. Its openness is precisely what made it the world's largest real-time payments system. UPI now accounts for 85% of India's retail digital payments in FY2025-26, and it got there by giving users a free, frictionless choice at every transaction.
UPI Meta, as currently proposed, subtly inverts that architecture. It shifts the moment of competition from the checkout page — where every app gets an equal shot at every transaction — to the onboarding moment, where installed base and brand recognition determine everything. It is, in a quiet way, the privatisation of a public infrastructure's front door.
NPCI's goal — fighting Apple Pay, matching tokenised cards — is legitimate. But the unintended consequence could be a duopoly so entrenched that the 30% cap, when it finally arrives, has nothing meaningful left to cap.
The deepest irony of UPI Meta is this: India built UPI to prove that open, government-run infrastructure could beat Big Tech. The response to Big Tech arriving may end up handing the network to two of Big Tech's closest Indian allies.
PhonePe is backed by Walmart. Google Pay is backed by Google. Amazon Pay and WhatsApp Pay — backed by Amazon and Meta respectively — are now arguing they cannot get a fair shot either. In the race to keep Apple out, the question worth sitting with is: who exactly does India end up letting in?