Case Study: UPI as a Brand Platform and What Banks Lost and Gained

By Yamm Labs · Updated September 2026 · 11 min read

A customer at a chai counter in Gurugram scans a printed QR code, types forty rupees and taps pay. The screen that confirms the payment is purple or blue or white, and it belongs to PhonePe, Google Pay or Paytm. The bank that holds her salary, and the bank that actually moved the money, appear only as a few letters after the @ in a UPI ID.

That is the whole case study in one tap, and the reason UPI is worth reading as a brand platform, not only as a way to pay. India built a public payment rail, invited banks and apps onto it, and the brand that customers remember turned out to be the app on the phone, not the institution behind the account.

What was UPI when banks launched it in 2016?

UPI is a real-time payment system run by the National Payments Corporation of India (NPCI). According to the Government of India’s Digital India page on UPI, the pilot launch took place on 11 April 2016 in Mumbai, performed by the then RBI Governor, with 21 member banks taking part. The same page records that banks began uploading their UPI-enabled apps to the Google Play store from 25 August 2016.

That starting position matters for the brand story. On day one, UPI looked like a bank product. The apps were bank apps, the customer relationship was the bank’s, and the logic of the launch assumed that each bank would bring its own customers onto the rail through its own interface.

The design of the rail pointed somewhere else. UPI was built to be interoperable: any account at a participating bank can pay any other, and the app used to send the money does not have to belong to the bank that holds the account. Once the rail allowed third-party application providers, known as TPAPs, to sit on top of partner banks, the question of who owned the customer’s screen was open.

Why did PhonePe, Google Pay and Paytm become the brand of UPI instead of the banks?

Because on an interoperable rail the product is identical underneath, and the only thing left to compete on is the experience at the front. The apps put their whole brand behind that one screen. Banks spread theirs across branches, cards, net banking, loans and a mobile app that did many things besides UPI.

The numbers that are public show how complete the shift became. In February 2024, TechCrunch reported that a parliamentary standing committee had flagged PhonePe at 46.91% and Google Pay at 36.39% of UPI transactions for October and November 2023, a combined share of about 83%. The same committee noted that the market share by volume of BHIM UPI, NPCI’s own app, was 0.22%.

The concentration held through 2025. DD News, the public broadcaster, reported in September 2025 that UPI crossed 20 billion transactions in August 2025 for the first time, worth ₹24.85 lakh crore. Of those, PhonePe handled about 9.6 billion, Google Pay about 7.4 billion and Paytm about 1.6 billion. By value, PhonePe held 48.64% and Google Pay 35.53%, according to the same report. Bank-operated apps were not broken out in that report, which tells its own story about where attention sits.

Three brand mechanics explain the result:

• Frequency beats depth. A customer opens a payment app several times a day and a bank app a few times a month. The brand seen most often becomes the brand remembered.
• One job, one screen. The apps launched as payment tools first. Their home screens led with scan, pay and send, so the UPI moment and the app’s identity were the same thing.
• The bank became a suffix. Google Pay’s own help page explains that UPI IDs on the app end in @oksbi, @okhdfcbank, @okaxis or @okicici, each pointing to a partner bank. PhonePe’s June 2020 press release introduced @ibl for ICICI Bank and @ybl for YES Bank, and a February 2021 release added @axl for Axis Bank. The bank is present in every transaction, but only as a routing code.

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What did banks decide to do when third-party apps took the front screen?

Banks did not all make the same choice, and most made several at once. The public record shows four roles a bank could take on the rail, each with a different brand outcome.

The PSP role is where most of the brand trade was made. A bank that agreed to sit behind a large app accepted that its name would show up as a few letters in a UPI ID in exchange for volume, a processing role and a line in the incentive scheme. Few customers ever notice which suffix they hold. When they do, it is usually because something went wrong.

The question is the same one a bank faces with any partner product. Our guide to brand architecture for a bank with multiple products covers when a masterbrand should lead and when an endorsed or invisible role is the better commercial choice. UPI forced that choice on every bank at once.

What did banks lose on the UPI rail?

The losses are clearer than the gains, because they are visible on every phone.

• The daily brand moment. The pay screen, the success tick and the transaction history are where a payments brand is built. For most UPI volume reported publicly, those screens belong to third-party apps.
• Fee income on everyday merchant payments. A Ministry of Finance note published by PIB in March 2025 states that since January 2020, the merchant discount rate has been zero for RuPay debit card and BHIM-UPI transactions, through amendments to the payments and income-tax laws. The same note cites an NPCI ceiling of up to 0.30% MDR on UPI merchant payments. A bank processing UPI cannot price the service the way it prices cards.
• Control of the story in a crisis. When a payment fails, the customer blames the app they tapped or the bank they recognise, whichever is closer to hand. A PSP bank that is invisible in good times still carries operational risk in bad ones.

How much fee income banks gave up is not publicly reported in a form that can be attributed to UPI alone. Any figure quoted without a primary source should be treated with care.

What did banks gain from UPI as a platform?

The gains are real but sit behind the screen, which is why they rarely enter the brand conversation.

• A government-funded incentive shared across the chain. The same PIB note describes a Cabinet-approved incentive scheme with an estimated outlay of ₹1,500 crore for 1 April 2024 to 31 March 2025. It pays 0.15% of transaction value on UPI merchant payments up to ₹2,000 to small merchants. The incentive goes to the acquiring bank and is then shared with the issuer bank, the PSP bank and the app provider.
• A performance standard written into the money. Under that scheme, 80% of an acquiring bank’s admitted claim is paid unconditionally each quarter. Of the remaining 20%, half depends on the bank’s technical decline rate staying below 0.75%, and half on system uptime above 99.5%. Reliability is literally what the bank gets paid for.
• A structural edge for bank apps. NPCI’s proposed 30% cap on any single third-party app’s share of UPI volume, first introduced in November 2020, has been deferred twice. Business Today reported in December 2024 that NPCI extended compliance for existing apps above the cap to 31 December 2026, and that bank-operated UPI apps are exempt from the cap.
• A place in the rescue when an app’s bank failed. In February 2024 the RBI advised NPCI to examine One97 Communications’ request to become a TPAP so the Paytm app could keep running UPI, and suggested that four to five banks with high-volume capability be certified as PSP banks, according to the RBI press release of 23 February 2024. On 14 March 2024, NPCI approved One97 as a TPAP under the multi-bank model with Axis Bank, HDFC Bank, SBI and YES Bank as PSP banks, as Business Today reported.

Whether the PSP and acquiring roles have made UPI profitable for any individual bank is not publicly reported. What the record does show is that the banks with scale in processing became the institutions regulators turned to when a large app needed a new home.

Which regulator-driven design decisions shape a UPI payment screen?

Many agencies say they are compliance-aware. On UPI, the regulator has already made several design decisions for every brand on the rail, and a good brand team starts from them.

• Screen sequence: the bank name, not the nickname, on the pre-payment screen. A published legal summary of an NPCI circular dated 24 April 2025 reports that it required UPI apps, by 30 June 2025, to show only the ultimate beneficiary’s name as held in bank records on the pre-transaction details page. Apps also had to disable any feature that let users edit the beneficiary’s name. The design consequence is that the most trusted line on the screen is a bank record, so the layout has to give that line room, weight and a fixed position above the pay button.
• Handle continuity: a UPI ID is a brand asset that must survive a regulatory event. When Paytm moved off Paytm Payments Bank, the RBI’s press release asked that @paytm handles be migrated smoothly to a set of new banks. Business Today reported that the @paytm handle would be redirected to YES Bank so users and merchants could keep transacting and keep AutoPay mandates. The customer-facing string stayed the same while the bank behind it changed.
• Reliability as a paid promise. The incentive scheme’s decline and uptime thresholds turn a back-end metric into something a bank can say in public with evidence behind it. A bank that meets them has a claim no app can make on its behalf.

Each of these is a decision a designer can point to: a line position, a string that cannot change, a number that belongs in the proof section of a pitch. That is what regulator-driven design looks like in practice, and it is the same discipline we describe in our guide to lending app branding that feels trustworthy, where the key fact statement and the lender’s name carry the trust.

On a public rail, customers remember the screen they tapped, not the bank that settled the money.

What should a bank, insurer or fund learn from UPI as a brand platform?

UPI is the clearest Indian example of a pattern that will repeat. Account aggregation, open credit networks and insurance marketplaces all follow the same logic: a shared rail, many front ends, and a brand that goes to whoever owns the screen the customer taps most often.

• Decide your role before you design your logo placement. Front-screen brand, co-brand or invisible infrastructure are three different jobs with three different budgets. Pick one per product, and say so in the brief.
• Own the strings. Handles, sender IDs, SMS headers, beneficiary names and short codes are read more closely than any campaign line. Write them with the same care as a tagline, and plan how they will survive a partner change.
• Turn infrastructure metrics into proof. Uptime and decline rates are public-policy standards on UPI. A bank that meets them can use them in B2B positioning with merchants and partner apps.
• Design the failure state. The moment a customer notices the bank behind the app is usually a failed or delayed payment. The message, the helpline and the refund timeline are brand work.
• Keep the regulator’s line in the layout from day one. When NPCI or the RBI fixes what a screen must show, that element comes first in the wireframe, not last in the review.

For a wider view of how these choices play out across banks, insurers, lenders and funds, our guide to BFSI branding in India sets out the full decision set.

People also ask

Why do UPI IDs on Google Pay and PhonePe show a bank name I do not use?

The suffix in a UPI ID names the payment service provider bank that processes the app’s transactions, not necessarily the bank that holds your account. Google Pay uses handles such as @okaxis and @oksbi, and PhonePe uses @ybl, @ibl and @axl, each tied to a partner bank.

Are bank UPI apps covered by NPCI’s 30% market share cap?

According to Business Today’s report on NPCI’s December 2024 extension, the cap applies to third-party app providers and bank-operated UPI apps are exempt. Existing apps above the cap were given until 31 December 2026 to comply.

Do banks earn money from UPI payments?

Merchant discount rate on UPI has been zero since January 2020, according to the Ministry of Finance. Banks can receive a share of a government incentive on small merchant payments up to ₹2,000, but how much any bank earns from UPI overall is not publicly reported.

What changed on the UPI payment screen in 2025?

From 30 June 2025, NPCI required apps to show the beneficiary’s name as held in bank records on the pre-payment screen, and to remove features that let users edit that name. The aim was to help customers confirm who they are paying before they pay.