The National Payments Corporation of India (NPCI), along with the Reserve Bank of India (RBI), has decided to implement its proposed 31 December deadline for limiting the volume cap for third-party app providers (TPAP), as per reports. The NPCI is responsible for the Unified Payments Interface (UPI) digital system. To avoid any monopoly by UPI apps, a proposal of a 30 per cent volume cap has been sent by the NPCI for approval from the RBI. Currently, there are no transaction limits on any UPI app, but the move implies that we may end up losing the ability to make unlimited transactions via applications like Google Pay. The market is presently dominated by Google Pay and PhonePe, who have a combined share of roughly 80 per cent.
Following the proposal, a meeting was reportedly held for understanding the present status quo comprehensively as stated by the Mint. In the meeting, senior officials from RBI, NPCI, and the Ministry of Finance were present. But no decision has been taken yet regarding the proposal. As per some reports, it is believed that NCPI was requested by the industry stakeholders to extend the deadline.
Presently, there is no information regarding the likelihood of the deadline’s extension. The delay of the deadline has already been requested for at least three years by PhonePe. Some other players want the deadline to be extended by five years according to the reports gathered by India Today.
The spokesperson of Paytm Payments Bank has stated that the proposed implementation of the UPI market cap is going to be very helpful for the UPI ecosystem and that it will help in the growth of digital payments and make them more accessible. The spokesperson added that the move is also going to democratise the platform for people and put a halt to the risk of monopoly by any company.
As reported by various news outlets, the issue of UPI market limit implementation may get resolved by the end of December.
NCPI had first presented the order limiting the volume of UPI transactions to 30 per cent in 2020. But later, two more years were offered to the UPI apps for complying with the directive.