Alternative UPI payment apps: A parliamentary panel has called upon the government to boost the growth of domestic fintech firms to diversify the digital payments application landscape dominated by Walmart-backed PhonePe and Alphabet’s Google Pay, which collectively hold over 83 per cent of the market.

The panel's 58-page report proposes various measures amid concerns over Paytm's recent setbacks in its payments bank operations, prompted by a recent directive from the Reserve Bank of India. The directive halts Paytm Payments Bank's operations, potentially diminishing its market share further against competitors like PhonePe and Google Pay.

PhonePe claimed 46.91 per cent of the UPI market share by volume from October to November 2023, while Google Pay held 36.39 per cent, according to the report. In contrast, indigenous BHIM UPI accounted for only 0.22 per cent of the market share by volume.

The National Payments Corporation of India has echoed these concerns about the duopoly in the mobile payments sector and previously suggested capping market share to ensure fair competition. The NPCI extended the deadline for this measure to the end of 2024, as Google Pay and PhonePe collectively held less than 80 per cent market share when initially proposed in 2020.

The report underlines the promotion of local fintech entities in alignment with the Make in India initiative, urging concerted efforts to nurture indigenous players in the fintech space.