NPCI Extends Market Share Cap on UPI Apps By Another Two Years

The National Payments Corporation of India (NPCI), founded in 2008, plays a crucial role under the Reserve Bank of India in promoting digital payments and settlement systems across the nation. Based in Mumbai, NPCI operates platforms such as UPI, RuPay, IMPS, and BHIM, transforming India’s payment landscape by facilitating secure, immediate, and seamless transactions.

NPCI Extends Deadline

NPCI has postponed the deadline for Unified Payments Interface (UPI) providers to comply with its 30% market share cap by an additional two years, now set for December 31, 2026.

PhonePe and Google Pay Dominating UPI Transactions

This decision offers temporary respite to PhonePe, owned by Walmart, and Google Pay, both of which account for over 85% of the UPI payments sector, granting them extra time to make the necessary adjustments to meet the limit.

The challenge of reducing their market share to comply with the new regulations has proven particularly difficult for PhonePe, based in Bengaluru, which currently controls close to 50% of the UPI market.

PhonePe and Google Pay Accounted for 15.4 Billion UPI Transactions

In November, NPCI reported that PhonePe handled 7.4 billion UPI payments, while Google Pay recorded 5.7 billion transactions, out of a total of 15.4 billion UPI payments. Following PhonePe and Google Pay, Paytm ranks next, with Navi, Cred, and others trailing behind.

The NPCI initially suggested a 30% market share cap in 2020, stating that those surpassing this threshold should comply within two years. However, the response from industry players was overwhelmingly negative regarding the limitation on business expansion, leading to an extension of the timeline by another two years until December 31, 2024.

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