The National Payment Corporation of India (NPCI) has decided to postpone its plan to implement a 30 percent cap on any individual app's share of transactions within the Unified Payments Interface (UPI). This recent development comes as a significant relief for PhonePe, backed by Walmart, and Google Pay, which together account for 85 percent of UPI transactions. The cap was intended to prevent major technology companies from dominating the country's digital payment landscape. The new deadline has now been extended to December 31, 2026.
So, how does this decision affect UPI users in India?
NPCI, which is supported by over 50 retail banks, has been trying to find a way to enforce these restrictions without disrupting services for UPI users. The organization engaged in extensive discussions with industry leaders throughout 2024 to explore feasible options for implementing the cap, but unfortunately, no viable solutions emerged.
For now, UPI users can continue to make payments seamlessly using their preferred UPI services without any interruptions.
This isn’t the first time this deadline has been postponed; the market share limit was initially proposed in 2020 and was later pushed to 2025. The recent decision further delays the control over the increasing influence of global technology companies on India’s digital economy.
Earlier this year, a group in the Indian parliament encouraged the government to help homegrown financial technology companies. The aim is to create more options for consumers that can compete with popular payment apps like PhonePe and Google Pay.
In other news, starting January 1, 2025, there will be important updates to how UPI payments work in India. The Reserve Bank of India (RBI) is making these changes to make it easier for users. One of the biggest updates is that people will be allowed to send larger amounts of money through UPI than they could before. This means you'll have more flexibility and convenience when making payments using UPI.
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