No unlimited payments anymore; Centre to impose transaction limit on UPI appstext_fields
New Delhi: The National Payments Corporation of India (NPCI), which operates the UPI digital pipeline in India is in discussions with the Reserve bank to limit the transaction of UPI apps like Google Pay, PhonePe, Paytm, and others.
Previously, a deadline is proposed, (December 31) for limiting player volume to 30 per cent. If the regulation is imposed, users may not be able to make unlimited payments through payment apps.
As of now there is no volume cap existing and Google Pay and PhonePe account for roughly 80 percent of the market.
In order to avoid concentration risk, in November 2022, NPCI proposed a 30 per cent volume cap for third-party app providers (TPAP).
A meeting has already taken place to comprehensively look at all aspects. Besides NPCI officials, senior officials of the finance ministry and RBI also participated in this meeting.
Currently, no final decision has been made to extend the December 31 deadline because the NPCI is evaluating all options.
However, the NPCI is expected to make a decision on UPI market cap implementation by the end of this month.
In 2020, NPCI issued a directive capping the share of transactions that a third-party application provider could process at 30 per cent of the volume of transactions handled on UPI, effective January 1, 2021, to be calculated based on the volume of transactions processed in the previous three months.