The National Payments Corporation of India (NPCI) is planning to launch a new system called UPI Meta. This system is a tokenisation layer (a way to save payment details securely) that lets you set a favorite UPI app on merchant websites like Amazon or Swiggy. Instead of opening your UPI app every time to pay, you would just enter your PIN or use your fingerprint directly on the shopping site. This makes paying very fast, similar to how saved credit cards work. NPCI wants to launch this around the Global Fintech Fest later this year to compete with global players like Apple Pay.

However, smaller UPI apps are not happy. Companies like Navi, super.money, and BHIM (which only have about 1% to 2% market share) have written to NPCI. They feel that UPI Meta will mostly benefit the two big brands: PhonePe and Google Pay. Currently, PhonePe holds about 45% of the market and Google Pay holds 33%. The smaller apps believe that if a customer picks a 'favorite' app once during setup, they will never bother to change it. This would lock in the dominance of the biggest players forever.

These smaller Third-Party Application Providers (TPAPs - companies that offer UPI apps but are not banks) argue that the current system is not broken. They say that billions of transactions happen every month without any major issues. They don't see any proof that customers are canceling orders just because they have to be redirected to their UPI app. Unlike credit cards, where typing numbers is hard, UPI is already very simple. Therefore, they think this new 'solution' is solving a problem that doesn't exist.

The main worry is about 'consumer choice.' In the current system, a user can choose a different app for every transaction. If one app offers better cashback, the user can switch easily. But with UPI Meta, the choice happens only once during 'onboarding' (the first time a user sets up the payment). Research shows that digital users rarely change their default settings. This means a user who picks a big app on day one will likely stay with it forever, making it impossible for new, smaller apps to grow their share of transactions.

For bank officers, this is an important development to watch. While NPCI wants to make payments smoother for customers, they must also ensure the market stays fair. If only two apps control all payments, it creates a 'market concentration risk' (a situation where a few players hold too much power). Bank-owned apps like BHIM could find it even harder to compete if these rules are finalized without changes. Smaller players are now asking NPCI for a 'wider consultation' (a meeting with all types of companies) to discuss these risks.

Going forward, the industry is waiting to see if NPCI will change the design of UPI Meta or delay the launch. The goal is to keep India’s UPI ecosystem 'open architecture' (a system where anyone can join and compete). If you are a banker or a customer, you should watch for updates during the Global Fintech Fest. The final decision will decide if we continue to have many UPI app options or if we will only see a few big names on every shopping website.