Macquarie Says NPCI’s UPI Lite To Pose Threat On Wallet Business: Report

Paytm’s most bearish analyst, Macquarie has said that the NPCI’s upcoming UPI Lite would pose a threat to wallet business in India, Moneycontrol reported. As Paytm has 60 to 70 per cent of the market share in the wallet business, the company will bear the maximum impact due to UPI Lite Service, according to the report. 

The development comes at a time when the shares of Paytm are trading at an all-time low and the country’s apex bank, the Reserve Bank of India, has barred the fintech’s Paytm bank from adding new customers. Earlier this month, Macquarie reduced the target price of stocks of One97 Communications Limited, Paytm's parent company by 36 per cent from Rs 700 to Rs 450. On Thursday, the shares of One97 Communications were down by -1.84 per cent at Rs 531.   

According to the report, Macquarie said, “The recent decision to launch UPI Lite by NPCI can potentially further de-clog the banking system network, enable them to further enhance UPI infrastructure and offer wallet-like features in UPI Lite thereby further enhance the value proposition of UPI ecosystem and reduce the attractiveness of wallets."

The UPI Lite payment service was launched by the National Payment Corporation of India in March this year, to enable people to conduct offline payments. It follows the RBI’s framework for facilitating small-ticket digital payments in the offline mode, thus including even those citizens who do not have internet connectivity. Until February 2022, 4,527.49 million UPI transactions worth Rs 8,26,843 were done online.