It appears that Google Pay and other Unified Payments Interface (UPI) payment apps will soon no longer allow users in India to conduct an infinite 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, says a report from ANI (TPAP).
With a combined 80 percent of the market, Google Pay and PhonePe are now dominating. In order to reduce the risk of concentration, NPCI sent the RBI a request 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.
A meeting was apparently conducted after the proposal to ‘comprehensively look at all the elements.’ Senior representatives from the finance ministry and the RBI were also present at the meeting in addition to NPCI representatives. No choice has been made in this regard as of yet.
According to industry stakeholders, some want NCPI to extend the deadline, and this is currently being looked at. The problem with the implementation of UPI market cap would be fixed by the end of this month.
The identical order to cap the number of transactions at 30% was first made by NCPI back in 2020, but it was later overruled and the UPI apps were granted at least two more years to comply with the requirement.
There is no information available at this time regarding the likelihood of a deadline extension.
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 clarification.