The latest ETtech Morning Dispatch highlights two significant developments shaping India’s digital payments and edtech landscapes. At the forefront is the growing dominance of the Unified Payments Interface (UPI), which continues to expand rapidly across the country’s digital economy. As UPI becomes increasingly ubiquitous for everyday transactions, other digital and traditional payment methods are losing ground, with usage of systems like IMPS and RuPay showing signs of stagnation or decline. This trend underscores how UPI’s convenience and widespread adoption are reshaping the competitive dynamics of India’s payment ecosystem.

KeyHighlights

• UPI’s rapid growth is sidelining alternative payment systems, reshaping competition in India’s digital payments ecosystem.
• Unacademy faces employee concerns after sharply reducing the ESOP exercise window for former staff.

Analysts note that while this trend represents digital payments maturing at a large scale, it also raises concerns about diminished competition among payments platforms, potentially limiting consumer choice and innovation in alternate payment rails.

The newsletter also draws attention to challenges at Unacademy, a major Indian edtech company, regarding its Employee Stock Ownership Plan (ESOP) framework. The company has recently amended its ESOP policy, drastically shrinking the window for former employees to exercise their vested options. Previously, ex-staff had up to ten years to convert stock options into shares; under the new rules, they now have only 30 days to do so, or risk forfeiting these vested benefits.

Also Read: IMF Ranks India's UPI the World's Largest Real-time Payments Platform

This change has sparked concern among former employees, particularly given Unacademy’s current valuation — significantly lower than its peak — and ongoing funding and operational pressures in the broader edtech sector. Industry watchers suggest that the tightened ESOP exercise window may influence talent retention and morale, and reflects broader strategic adjustments by the company amid evolving market conditions.

Together, these developments illustrate key shifts within India’s fintech and startup space: UPI’s rapid rise is reshaping payments behavior, while structural changes at high-profile startups like Unacademy highlight the challenges of managing equity incentives in a changing funding environment.