NPCI in talks with RBI on volume cap deadline

Spread the love

The National Payments Corporation of India (NPCI), which runs the UPI digital pipeline, is in talks with the Reserve Bank on the implementation of the proposed December 31 deadline to limit the volume cap of players to 30 per cent.

Currently, there is no volume cap. So, the two players – Google Pay and PhonePe – have a market share of around 80 per cent.

NPCI had proposed a 30 per cent volume cap for third party app providers (TPAPs) in November 2022 to avoid concentration risk.

In this regard, sources said, a meeting was called to comprehensively consider all aspects. Apart from the officials of NPCI, senior officials of Ministry of Finance and RBI also participated in it.

Sources said that at present, NPCI is evaluating all possibilities and no final decision has been taken on extending the December 31 deadline.

He said that NPCI has also received representations from industry stakeholders for extension of the deadline and the same are being examined.

According to sources, NPCI may take a decision on the issue of implementation of UPI market cap by the end of this month.

In 2020, NPCI came out with a directive to cap the transaction share a third-party application provider (TPAP) can process at 30 per cent of the transaction volume on UPI with effect from January 1, 2021, calculated from January 1, 2021. To be done on 2021. Based on the volume of transactions processed during the last three months.

However, it gave existing TPAPs, such as PhonePe and Google Pay, which have more than the desired market cap, two additional years from next year to comply with the directive.

Earlier this year, the Reserve Bank of India (RBI) came out with a consultation paper on charges in payment systems, which made a case for levying a levelized charge on UPI transactions on the lines of Immediate Payment Service (IMPS) transactions.

The government later issued a statement saying that UPI is a digital public good with immense convenience and productivity benefits for the economy, and has no plans to levy any charges for UPI services.

Source link

Spread the love

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.