A parliamentary panel has directed attention towards the overwhelming market share held by PhonePe and Google Pay within the Unified Payments Interface (UPI) space. Expressing concerns over their dominance, the panel emphasized the need for regulatory measures to address this issue.
Concerns Raised
The panel’s report underscored the significant market presence of PhonePe and Google Pay, pointing out that these two platforms collectively accounted for over 80% of the total UPI transactions in 2023. This concentration of market share raised concerns about potential monopolistic practices and the lack of a level playing field for other players in the fintech sector.
Call for Promoting Indigenous Players
In addition to highlighting the dominance of PhonePe and Google Pay, the parliamentary panel advocated for the promotion of indigenous players in the fintech industry. By supporting and fostering homegrown fintech firms, the panel aims to create a more diverse and competitive ecosystem that encourages innovation and benefits consumers.
Addressing Market Concentration
To address the issue of market concentration and promote fair competition, the panel suggested implementing regulatory measures aimed at ensuring a more equitable distribution of market share among UPI service providers. These measures could include introducing stricter regulations or guidelines for dominant players, as well as providing incentives and support for emerging fintech startups.
Impact on the Fintech Sector
The dominance of PhonePe and Google Pay in the UPI space not only limits competition but also poses challenges for smaller players trying to enter the market. By controlling a significant portion of UPI transactions, these platforms have considerable influence over the digital payments landscape, potentially hindering the growth and expansion of other fintech firms.
Conclusion
The parliamentary panel’s focus on the dominance of PhonePe and Google Pay in the UPI sector reflects the growing concerns surrounding market concentration and the need for regulatory intervention to ensure a level playing field. By addressing these issues and promoting competition, policymakers aim to foster a more vibrant and inclusive fintech ecosystem that benefits both consumers and industry players alike.
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