It seems that people in India may soon lose the ability to make unlimited transactions via Google Pay and other Unified Payments Interface (UPI) payment apps. According to a report from ANI, the National Payments Corporation of India (NPCI), which is responsible for UPI digital system, is working with Reserve Bank to implement its proposed December 31 deadline for limiting the volume cap for third-party app providers (TPAP).
Google Pay and PhonePe are currently ruling the market with around 80 percent share. Now, to avoid concentration risk, NPCI sent a proposal of a 30 percent volume cap in November this year, which it now wants the RBI to approve. Currently, there is no transaction limit on UPI-based apps like Google Pay, PhonePe, and Paytm.
Following the proposal, a meeting was reportedly held to "comprehensively look at all the aspects." Apart from NPCI officials, senior officials from finance ministry and RBI were also present at the meeting. As of now, no decision has been taken in regard to this.
Some of the industry stakeholders reportedly want NCPI to extend the deadline and this is being examined right now. There are reports claiming that the issue of UPI market cap implementation will be resolved by the end of this month.
Back in 2020, NCPI first represented the same order to cap the volume of transactions at 30 percent; however, the desired market cap was later exceeded and the UPI apps were given at least two additional years to comply with the directive.
At the moment, there is no information on whether there is a possibility of an extension to the deadline. PhonePe has already requested to delay the deadline of December 31 by at least three years, and some other players require it to be extended by five years, as per reports. We will likely get more clarity on this by the end of November.
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