NPCI Extends Deadline For UPI Platforms To Comply With 30% Market Share Cap
The deadline has been extended by two years and will now be implemented by Dec. 31, 2024.
The governing body of the unified payment interface, the National Payments Corp. of India, has extended the deadline for UPI applications to comply with a 30% cap on transaction volumes by two years.
Taking into account the present usage and future potential of UPI and other relevant factors, the timelines for compliance of existing third-party application providers, who are exceeding the volume cap are extended by two years, i.e., till Dec. 31, 2024 to comply with the volume cap.NPCI circular
The cap applies only to TPAPs, and UPI apps offered by banks are exempt from such a cap.
"NPCI has taken the right call. Putting a cap now will slow down the usage," Vishwas Patel, chairman of the Payments Council of India, told BQ Prime.
It would instead be better to let all players grow and expand UPI's user base, he said.
The extension comes as a positive change for both PhonePe and Google Pay, which dominate the UPI payments market and had a transaction volume share of 47% and 33%, respectively, in October, according to NPCI data.
Combined with Paytm, the three players handle a little over 95% of UPI volume.
"We are obviously relieved to see the UPI market share cap get extended by two years. The new NPCI circular itself acknowledges that the burden is on other existing and new UPI players to invest more time, effort and money to increase their own UPI market share," Sameer Nigam, chief executive at PhonePe, said in a statement.
Although WhatsApp's payment service was widely viewed as one that could challenge PhonePe and Google Pay's market share, it has struggled to scale and had a market share of 0.1% in October. Amazon Pay held a market share of 0.4% in the same month.
The cap was earlier supposed to be implemented by Dec. 31, 2022.
"It is imperative that other existing and new players—banks and non-banks—shall scale up their consumer outreach for the growth of UPI and achieve overall market equilibrium," NPCI said in its circular.
