It appears that Google Pay and other Unified Payments Interface (UPI) payment apps will soon no longer allow users in India to conduct an infinite number of transactions. The National Payments Corporation of India (NPCI), which is in charge of the UPI digital system, is collaborating with the Reserve Bank to put into effect its suggested December 31 deadline for lowering the volume cap for third-party app providers, according to a report from ANI (TPAP).
With a combined 80 percent of the market, Google Pay and PhonePe are now dominating. In order to reduce the risk of concentration, NPCI sent the RBI a request for a 30 percent volume cap in November of this year. At the moment, UPI-based applications like Google Pay, PhonePe, and Paytm have no transaction limits.
A meeting was apparently conducted after the proposal to “comprehensively look at all the elements.” Senior representatives from the finance ministry and the RBI also attended the meeting in addition to NPCI representatives. However, the decision isn’t final yet.
Few stakeholders want NCPI to prolong the deadline, and this is currently being looked at. According to some reports, the problem with the implementation of the UPI market cap would be fixed by the end of this month.
The identical demand to cap the number of transactions at 30% was initially presented by NCPI in 2020; however, the targeted market cap was later surpassed and the UPI apps were allowed at least two more years to comply with the directive.
No details are available at this time regarding the likelihood of a deadline extension. According to reports, PhonePe has already asked for a minimum three-year extension of the December 31 deadline, and other companies want it extended for a maximum of five years. Most probably by the end of November, the users will have more clarity.