National Payments Corporation of India (NPCI) has extended the deadline for implementing market share caps on UPI apps by two years to December 2026. This decision will provide relief to PhonePe and Google Pay, which are leaders in the Indian UPI ecosystem.
National Payments Corporation of India (NPCI) has extended the deadline for implementing market share cap on Unified Payments Interface (UPI) apps by two years. Now this limit will not be applicable till December 2026. This decision has brought relief to major UPI platforms like PhonePe and Google Pay, which are leading the Indian UPI ecosystem.
What is market share cap?
The market share cap was proposed in 2020 with the aim of preventing any UPI payment app from having more than 30% market share. It was aimed at promoting competition and preventing monopoly. However, PhonePe currently has a market share of 47.8%, while Google Pay has 37%. Implementing the cap at this time could have hampered the services of these platforms, which serve millions of users.
Purpose of extending the deadline
NPCI has tried to balance competition and innovation in the market by extending the deadline. This will give emerging fintech platforms more time to strengthen their business.
New possibilities for WhatsApp Pay
NPCI has also removed the 100 million user limit on WhatsApp Pay, allowing the Meta-owned platform to compete more effectively in India’s digital payments space.
UPI’s growing popularity
UPI is projected to witness a sharp growth of 46% in 2024, with the number of transactions reaching 172 billion, up from 118 billion in 2023. This growth reflects the critical role UPI plays in India’s digital economy and the need for balanced regulatory changes.
Future prospects
With the new deadline, major apps such as PhonePe and Google Pay will get time to adapt their business models and diversify services. This extension may also encourage collaboration between established and new players, leading to better services for consumers.
