The UPI system relies solely on these apps, a growing threat every day

UPI digital payments: The Unified Payments Interface (UPI) has revolutionized digital transactions in India. The convenience of instant bank-to-bank payments via mobile has encouraged people to adopt a cashless lifestyle. Today, UPI is being used everywhere, from small shopkeepers to large companies. In September 2025, UPI set a new record of 19.63 billion transactions, totaling approximately ₹24.90 lakh crore.

The system relies solely on these apps

According to the India Fintech Foundation (IFF), approximately 80 percent of these massive transactions are being completed through just two major mobile apps. This situation creates a “concentration risk” for the system—that is, if one of these two apps experiences a technical issue, cyberattack, or policy dispute, the entire UPI infrastructure could be affected. Such heavy dependence increases the risk of imbalance and instability in the digital payment system.

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Opportunities for Small Apps

IFF believes that new and small third-party app providers (TPAPs) are not receiving adequate opportunities in the UPI ecosystem. Encouraging them will not only increase competition but also provide users with more choice and better services. This will also foster innovation, which is essential for the growth of India’s digital economy.

Government Develops Special Policy

IFF has urged the government, the Reserve Bank of India (RBI), and the National Payments Corporation of India (NPCI) to amend the UPI promotion policy. A policy should be formulated that encourages small apps to participate in transaction fees or technical support. This step will help prevent monopolies in the market and ensure the long-term sustainability of the digital payment system.

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The Need for Growth in Digital India

The strength of India’s digital economy depends on the stability of UPI. If a few apps continue to dominate UPI, it could limit both innovation and competition. Therefore, the government must enact policies that not only accelerate digital transactions but also encourage diversity and equal opportunity. Only then will this Digital India revolution become balanced and long-term.