Instead Of Market Cap In UPI, Encourage More Players Via Monetisation: Google Pay

Rather than an exogenous mechanism like an artificial cap, the solution to the UPI market share conundrum is to encourage more players in the market with a clear sight on monetisation, according to Google Pay.

"Our position has always been that a solution has to be market-oriented. In our opinion, the market-oriented approach is to have a diverse competitive ecosystem," Sharath Bulusu, Director, Product Management, Google Pay, told NDTV Profit.

The true goal behind this is to enable more players to come in but how that will happen requires a few things, he said.

"Firstly, foster an ecosystem and reduce the barriers of entry. At Google, as part of our Google for Startups programme, we actually fund technology startups, including in areas like fintech. The second thing is for startups to have the confidence that if I do enter, there should be a business out there. At the end of the day, they at least need to have the line of sight to say, How does this become a viable business, and therefore being able to monetise is also going to matter?" Bulusu said.

"From our point of view, rather than an exogenous mechanism, like saying there's an artificial cap, the right answer needs to be how can we enable more players to come in and enable that competition to thrive," the top executive added.

Current NPCI regulations require that no single UPI platform can have a market share larger than 30% by December 2024.

This would mean that the likes of market leaders PhonePe and Google Pay will have to reduce their share. PhonePe currently dominates, constituting over 48% of all UPI transactions. Google Pay stands at about 37%, according to the latest NPCI data.

The UPI market share cap has been a thorn in the path of PhonePe's IPO as well. CEO Sameer Nigam, at this year's Global Fintech Fest, had said he was "nervous about going public when there's a 30% market cap lurking."