Relief for PhonePe, Google Pay as NPCI extends UPI market cap deadline to Dec 31, 2024

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National Payments Corporation of India (NPCI), which runs UPI Digital PipelineThe regulator on Friday extended the deadline for capping the volume cap for TPAPs in UPI to 30% by two years till December 31, 2024.

TPAPs are third party app providers. Currently, there is no volume cap.

This should come as a relief to Unified Payments Interface (UPI) players such as Google Pay and PhonePe, which have a market share of around 80%.

NPCI had proposed a 30% volume cap for TPAPs in November 2022 to avoid concentration risk.

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

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.

Read also: Google Play Store allows subscription-based UPI payments; check how to use it

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