Digital wallet platform Google Pay has said that the policy to cap UPI (Unified Payments Interface) transactions on third-party apps at 30% could affect their further adoption in the country.
The National Payments Corporation of India (NPCI) had on November 5 limited UPI settlements by Third Party App Providers (TPAPs) at 30% of the market share, effective from January 1, 2021.
The 30% cap will be calculated on the basis of the total volume of transactions processed through UPI during the preceding three months (on a rolling basis).
Existing third-party UPI apps exceeding the specified cap will have a period of two years from January 2021, to comply with the transaction volume cap in a phased manner, NPCI said.
This intervention, via market cap, by the nodal agency for the retail payment systems has been hinted at by Google Pay to be reconsidered, as Indian consumers need to be given a "choice" for making digital payments.
"Digital payments in India are still in their infancy, and any interventions at this point should be made with a view to accelerating consumer choice and innovation. A choice-based and open model is key to driving this momentum. This announcement has come as a surprise and has implications for hundreds of millions of users who use UPI for their daily payments and could impact the further adoption of UPI and the end goal of financial inclusion," Sajith Sivanandan, Business Head, Google Pay and Next Billion User initiatives, India, said in a statement cited by Mint.
Meanwhile, the NPCI has not clarified as to what will happen once a third-party app hits the mandated volume limit of 30 per cent. The new rule will particularly take a toll on applications like Google Pay, PhonePe, Paytm, and others and might lead to a rise in number of failed transactions, much to the dismay of users.
The nodal agency for retail payment systems (NPCI) has also granted its approval to WhatsApp allowing it to go live on its UPI platform and expand (its) users in a phased manner. WhatsApp Pay, as it is called, has been allowed to register a user base of 20 million for now.
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today