The National Payments Corporation of India (NPCI) has imposed a 30% limit on the number of transactions third-party app providers (TRAPs) can process via the Unified Payments Interface (UPI).
NPCI is India’s flagship payments processor established in 2008.
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Through this move, NPCI aims to protect the growing UPI ecosystem in India.
The changes, which are expected to take effect from 1 January 2021, come after UPI reached two billion transactions per month.
Recently, India’s policy think tank NITI Aayog CEO Amitabh Kant announced that in October 2020, UPI transactions have breached the two billion mark.
He also added that the transaction value increased by 101%, from INR1.91trn ($25.79bn) to INR3.86trn ($52bn).
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By GlobalDataThe new 30% cap will be calculated on the total number of transactions processed via UPI during the preceding three months, on a rolling basis.
The existing TRAPs which exceed this limit will be given two years from January 2021 to comply with the new rules.
For instance, Walmart’s PhonePe has reached approximately 40% of market share in UPI transactions recently.
The developments will impact PhonePe as well as Google Pay the most, as their market share exceed the new 30% limit.
Google Pay contributes more than 40% of UPI transactions per month, while the Paytm and Mobikwik apps together have 20% market share.
Recently, NPCI also approved Facebook-owned instant messaging app WhatsApp to launch its payment services in India, in a phased manner.
