Tata Group to launch UPI App Soon

While digital payment majors like Google Pay, PhonePe, and PayTM rule the roost in the Indian market for online payment wallets, none other than the TATA Group is endeavoring to enter the market with its own United Payments Interface (UPI) based digital payment app.

With this move, TATA Group might soon be vying with the three above-mentioned digital payment operators who have fragmented and distributed the user base among themselves. TATA’s app might even consolidate the market in some way; if their app becomes popular with users.

As a pioneer and a large Indian conglomerate, TATA Group has been a market leader in several sectors from salt to steel. As per reports, for its new UPI app, the Group is seeking clearances from the National Payments Corporation of India (NPCI) before launching a third-party payments service provider.

TATA’s platform will use Unified Payments Interface (UPI) for transactions. The UPI App will be under Tata Group’s digital commerce unit, Tata Digital. According to reports, the Group is in talks with ICICI Bank to power its UPI system.

UPI or any non-banking payment gateways need to partner with a bank to make their UPI facility functional. If the transaction volumes are high on the UPI App, the app ties up with multiple banks to spread the transaction load. For example, Google Pay has agreements with SBI, HDFC, and ICICI banks to distribute its high transaction load.

In India, most digital payment transactions happen on either Google Pay or PhonePe. Other apps like Paytm, Amazon Pay, and WhatsApp Pay have a relatively lower share of the market. With Tata Group entering the fray, the market dynamics might change.

Tata Digital was founded in 2019. It is a wholly-owned subsidiary of Tata Sons and has several subsidiaries, including companies like Big Basket and Tata 1MG. In January 2022, Tata Group also set up Tata Fintech, a marketplace for financial products.