What is NPCI’s UPI Meta plan that has smaller payment apps concerned? | Finance News

Smaller Unified Payments Interface (UPI) apps have opposed a new checkout framework proposed by the National Payments Corporation of India (NPCI), called UPI Meta (also referred to as UPI Checkout). The companies have urged NPCI to reconsider the planned rollout, warning that the feature could further enhance the dominance of PhonePe and Google Pay in India’s digital payments ecosystem.

The concerns come at a time when NPCI is also attempting to reduce market concentration through a proposed 30 per cent cap on UPI transaction volumes for individual players, a measure whose implementation has been repeatedly deferred.

What is UPI Meta?

UPI Meta is reportedly being developed as a faster checkout mechanism for online purchases. The proposed feature would allow customers to securely save their preferred UPI ID with participating merchants, eliminating the need to select a UPI app or enter payment details every time they make a purchase.

The system is designed to work similarly to tokenised card payments already used on e-commerce platforms. Once a customer provides consent, merchants would be able to save their preferred UPI identity and linked bank account details, enabling subsequent payments to move directly to authentication through a UPI PIN or biometrics. In effect, a transaction could proceed from the merchant’s checkout page straight to the payment authentication screen without requiring the customer’s UPI app to open.

The feature is being seen as an attempt to keep UPI competitive with tokenised card payments and upcoming services such as Apple Pay, particularly when combined with biometric authentication. NPCI has not yet publicly announced the feature’s final rollout schedule or detailed implementation framework.

What does UPI Meta means for users?

UPI Meta is intended to simplify online payments by allowing users to save a preferred UPI ID on a merchant’s app or website. This could significantly shorten the checkout process by removing repeated steps involved in selecting an app and entering payment details.

The proposed framework would shift users from making a payment app choice during every transaction to making a one-time decision when setting up a saved payment preference. Once a UPI ID has been saved, payments can be completed more quickly using authentication methods such as a UPI PIN or biometrics.

For customers, this could make online purchases faster and more seamless. However, the system’s impact will depend on how merchants obtain user consent, present alternative payment options and allow users to modify or remove their saved payment preferences.

Why are smaller UPI apps opposing the proposal?

At the heart of the opposition is the concern that UPI Meta could give dominant players an even bigger advantage. Smaller UPI apps argue that once customers are asked to choose a preferred payment app during the initial set-up process, most are likely to select the app they already use most frequently, which, for a majority of India’s UPI users, would be either PhonePe or Google Pay.

The companies have warned that payment preferences created during onboarding are unlikely to change frequently, creating a structural advantage for the largest players with the biggest installed user bases.

The industry’s concerns are amplified by the current market structure. PhonePe accounts for around 45 per cent of UPI transaction volumes, while Google Pay holds another 33 per cent. Smaller players such as Navi, super.money and BHIM have gradually grown their market shares to around 1-2 per cent each.

The timing of the proposal has also attracted attention. According to a Business Standard report, the potential launch of Apple Pay in India this year has sharpened concerns within NPCI. Tokenised credit cards, coupled with biometric authentication and one-click checkout experiences, have narrowed UPI’s competitive advantage in online payments. Credit cards also remain strong competitors for higher-value transactions, particularly since UPI transactions do not attract a merchant discount rate.

UPI Meta is therefore being positioned as a way to make UPI’s checkout experience faster and more competitive, but smaller players contend that the benefits should not come at the cost of customer choice and market competition.

What other concerns have been raised?

The industry representation also warned that bypassing existing UPI checkout screens could deprive consumers of several useful features currently available during payment. These include issuer bank health indicators, balance checks, dynamic account selection, fraud controls and visibility of newer UPI offerings such as UPI Lite, Credit Cards on UPI and Credit Lines on UPI.