It appears that Google Pay and other Unified Payments Interface (UPI) payment apps will soon no longer allow users in India to conduct an unlimited number of transactions. The National Payments Corporation of India (NPCI), which is in charge of the UPI digital system, is collaborating with the Reserve Bank to put into effect its suggested December 31 deadline for lowering the volume cap for third-party app providers, according to a report from ANI.
With a combined 80 percent of the market, Google Pay and PhonePe are currently dominating. In order to reduce the risk of concentration, NPCI sent the RBI a proposal for a 30 percent volume cap in November of this year. At the moment, UPI-based applications like Google Pay, PhonePe, and Paytm have no transaction limits.
Following the proposal, a meeting was reportedly held to “comprehensively look at all the aspects.” Apart from NPCI officials, senior officials from the finance ministry and RBI were also present at the meeting. As of now, no decision has been taken in regard to this.
According to industry stakeholders, some want NPCI to extend the deadline, and this is currently being looked into. According to some reports, the problem with the implementation of the UPI market cap will be solved by the end of this month.
The same directive to cap the share of transactions at 30% was initially presented by NPCI in 2020; however, the desired market cap was later exceeded, and the UPI apps were given at least two more years to comply with the directive.
There is no information available at this time regarding the likelihood of a deadline extension. According to reports, PhonePe has already asked for a minimum three-year extension of the December 31 deadline, and some other players want a five-year extension. By the end of November, we should have more clarity.
