The National Payment Corporation of India on Thursday, 5 November, announced a cap of 30 percent on total volume of UPI (Unified Payments Interface) transaction processes by Third Part App (TPA) providers, which will come into place from January 2021.
According to the NPCI, Google Pay and PhonePe account for majority of the UPI transactions in the country. NPCI has now put a cap on the proportion of transactions that a single company can process in order to “address the risks and protect the UP ecosystem as it further scales up,” the NCP wrote in a statement.
The current UPI ecosystem is dominated by two major players - GooglePay and PhonePe - each accounting for 40 percent of UPI transaction in the country. The rest 20 percent is accounted for by Paytm and MobiKwik.
The cap on the 30 percent transactions will be calculated on the basis of volume transaction in processed in UPI during the preceding three months on a rolling basis.
However, it is not clear what will happen when a company hits a cap. If you are a GooglePay or PhonePe user, this cap may lead to failed transactions.
The news also comes on the heels of NPCI giving the green flag to WhatsApp Pay, where users can make transactions within the app using the UPI interface.