The National Payments Corporation of India’s (NPCI) mandate requiring payment apps to hold no more than 30 percent market share in the UPI ecosystem has now been deferred by two years to December 31, 2024. The UPI market share cap rules were first announced in November 2020.
“Taking into account the present usage and future potential of UPI, and other relevant factors, the timelines for compliance of existing TPAPs (third-party apps) who are exceeding the volume cap, is extended by two years i.e. till December 31, 2024, to comply with the volume cap,” the NPCI said in a circular on Friday.
Now that payments apps have another two years, they can breathe a sigh of relief for now. The extension offers the biggest breather to PhonePe and Google Pay as the two have a combined market share of over 80 percent on the UPI network.
The maximum market share in the UPI space is held by PhonePe which clocked 42.7 percent share in October; Google Pay had a 34.1 percent market share, at around 2.49 billion transactions in the same month. WhatsApp Pay and Amazon Pay managed to own small shares of 0.1 percent and 0.7 percent, respectively.
The inability of other players to scale up their operations is one of the reasons why NPCI chose to extend the deadline. “There are not a lot of options left since two players still dominate the network and there is a fear of customer disruption if platforms are asked to stop onboarding new users or stop transactions after a certain limit,” one of the sources said.