Why NPCI has extended UPI market cap deadline by 2 yrs
- The National Payments Corporation of India (NPCI) has extended by two years the deadline to comply with its 30% cap on the market share of platforms operating on the Unified Payments Interface (UPI).
Why did NPCI extend its UPI market cap deadline?
- NPCI had initially planned to enforce the market cap rules in January 2021, saying it would limit any single payments app from processing more than 30% of UPI transactions in a month, but has postponed the timeline several times since.
- Recently it extended the deadline yet again until December 31, 2024, “taking into account the present usage and future potential of UPI and other relevant factors”.
How could it impact UPI platforms?
- Move comes as a shot in the arm for PhonePe and Google Pay, which collectively control more than 80% of UPI’s market share.
- For platforms like Paytm and WhatsApp Pay, however, the extension could be seen as a natural loss.
- As of October, Paytm had a market share of 15% on UPI.
- In comparison, PhonePe had a 47% market share, while GooglePay accounted for around 35%.
How is UPI performing?
- After touching a new high of Rs 12.11 lakh crore in October, the UPI transaction value for the month of November came in at Rs 11.90 lakh crore.
- However, the transaction count at 7.3 billion in October remained the same in November.
- According to the Reserve Bank of India’s Payment Vision 2025, UPI is expected to register an average annualised growth of 50%.
Prelims Take Away
- UPI NPCI