New Delhi: As digital payment platforms PhonePe and Google Pay continue to dominate the Unified Payments Interface (UPI) market, the National Payments Corporation of India (NPCI) nears the deadline to enforce a 30 percent market share cap on UPI service providers. The question arises: Will NPCI implement the cap or extend the deadline?
In April, PhonePe led the UPI market with nearly 49 percent share across both P2M (person to merchant) and P2P (person to person) transactions, maintaining its top position since November 2020. Conversely, Google Pay captured a 38 percent UPI market share in the same period.
Meanwhile, Paytm’s market share in the UPI ecosystem declined to 8.4 percent in April, marking a third consecutive monthly drop for the fintech major.
In an effort to address the dominance of a few players in the UPI ecosystem, NPCI proposed a 30 percent market share cap for UPI payment apps in 2022. However, the deadline for implementing the market cap was never enforced, with the deadline set for December of this year.
Industry experts anticipate that NPCI will review the UPI deadline by the end of the year and is likely to extend it. Additionally, they believe it is “highly unlikely” that either the Reserve Bank of India (RBI) or the Ministry of Finance will advise NPCI to issue a circular enforcing the market cap, as such a move could potentially face legal challenges and may not withstand judicial scrutiny.
When approached for comment, NPCI did not provide an immediate response.
