Unravelling NPCI’s confusing UPI market share cap
The payments body has said no single app like Google Pay or PhonePe can hold over 30% of the market. How will that work?
9 November, 2020•11 min
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9 November, 2020•11 min
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Editor's note: Last Thursday night, the National Payments Corporation of India released two back-to-back announcements about the Unified Payments Interface, or UPI, its instantaneous bank-to-bank payments system. Announcement No. 1: NPCI has finally given approval for WhatsApp to “go live” on UPI. The Facebook-owned messaging app can expand its UPI payments user base in a “graded manner”, with an initial user limit of 20 million. Announcement No. 2: NPCI said that with UPI reaching 2 billion transactions a month, and with potential for future growth, it was putting in place a limit on the market share of any third-party UPI app. No single third-party app—such as Google Pay, PhonePe or Amazon Pay—will be allowed to process more than 30% of all UPI transactions, effective from 1 January 2021. “It will help to address the risks and protect the UPI ecosystem as it further scales up. The cap of 30% will be calculated basis the total volume of transactions processed in UPI during the preceding three months (on a rolling basis). The existing TPAPs exceeding the specified cap, will have a period of …
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