NPCI innovation app ‘UPI Plugin’ disrupts market

NPCI innovation app ‘UPI Plugin’ disrupts market

The National Payment Corporation of India (NPCI) has launched its innovative product called ‘UPI Plugin’ or merchant SDK (software development kit). This new app will enable online merchants to add a virtual payment address to collect money without a payments app.

Advantages of App ‘UPI Plugin’:

The newly launched app ‘UPI Plugin’ assists online merchants to add payment address with faster and enables them seamless payments without customers needing to go to a third party app.

Before UPI Plugin integration of UPI payments within their platform (website or app) was to become a TPAP (transaction processing and settlement) like Google Pay or PhonePe.

And it needs multiple approvals from NPCI, involving paperwork, compliance and certifications, all of which could take more than a year.

What makes difference?

The newly launched app will differentiate many process in easiest way for example, when a customer is using the Swiggy app and chooses for UPI payment it leads the customer to a UPI app such as Google Pay or PhonePe, through a notification prompt.

Then the payment is done again it leads the customer back to Swiggy where the order is completed.

This additional step creates slow process and even resulted in payment failures.

Now

The UPI Plugin will do the payment within the Swiggy app itself without going to a specific UPI app.

The Payment gateway and processing firms Paytm, Razorpay and Juspay have already ask their merchants with the option of enabling the SDK with the hope of improving success rates by up to 15 percent.

Disadvantages of the app:

This new app might go to be hurt UPI leaders PhonePe and Google Pay.

The probability of a lot of customers not going to these UPI apps to complete UPI payments could take away their dominant market share.

In UPI market share, PhonePe owns around 47% and Google Pay owns 33% market share.

High entry barriers

NPCI had introduced a rule which stated that no single TPAP player should have more than 30% market share on the UPI platform by January 2023.

After the introduction of a rule, NPCI realized that this will break down the market share and create serious disruption in the speed and ease of UPI transactions.

So the National Payment Corporation of India (NPCI) has extended the deadline by another two years to December 31, 2024.

Question & Answer:

Q1. What is the name of newly launched app by National Payment Corporation of India?

Ans. UPI Plugin

Q2. Who chairman of the National Payment Corporation of India?

Ans. Biswamohan Mahapatra

Q3. Where is headquarter of the National Payment Corporation of India located?

Ans. Mumbai, Maharashtra

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