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Paytm’s woes trigger fresh worries on UPI market share duopoly

Economic Times · 8m

The dominance of two major players, PhonePe and Google Pay, in the Unified Payments Interface (UPI) market has raised concerns about market concentration and lack of competition. As of February 2024, PhonePe accounted for 50% of UPI transactions, while Google Pay held a 39% share. The 30% market cap deadline, initially set for January 2023 and then extended to the end of 2024, has prompted uncertainty about its implementation. Startups are hesitant to invest in UPI due to the absence of monetization opportunities and the challenge of competing against established players. The Reserve Bank of India is considering penalties or mechanisms to regulate market share, while industry experts suggest creating scale-based regulations for dominant payment players. The future of UPI market dynamics remains uncertain without intervention.