The sources familiar with the development suggested that NPCI (National Payments Corporation of India) is currently deliberating on raising the market share cap for the third-party UPI (Unified Payments Interface) apps. As of now, the current market share cap of the UPI apps is 30 percent. The proposal can raise the market share cap for UPI apps by more than 40 percent. However, no official confirmation has come up as of yet but reliable sources including Tech Crunch claimed that NPCI is mulling allowing the third-party apps to hold over 40 percent market share cap. Since this news broke out, market enthusiasts and fin-tech corporates have been keenly awaiting an official announcement regarding the same. In case, you are also scrambling to the web regarding the same, then this article is for you. Here we have shared all the imperative details that you need to know about it. Scroll down the page.
NPCI Considering To Increase Market Share Cap of UPI Apps
The news that NPCI is mulling allowing the third-party payment apps to hold more than 40 percent market share cap surfaced amid the reports claiming that new third-party payment apps entering the ecosystem of UPI had been already notified that the previous proposed market share cap of 30 percent to hold, might not be allowed. Meanwhile, this news caused the new entrants in the UPI ecosystem, to wait and watch the situation as they seek more clarity before investing. In addition, it is also being said that the National Payments Corporation of India previously ruled that third-party payment apps could hold only a 30 percent market share cap, in a bid to control the dominance of apps such as Google Pay and Phonepe.
In November 2020, NPCI proposed that a market share cap of only 30 percent can be held by third-party payment apps such as Google Pay and Phonepe, as it wanted to limit the dominance of the leading digital payment apps like Phonepe. Additionally, the National Payments Corporations of India also issued deadlines first till December 2022 which was further extended to December 2024. Earlier this year, familiar sources suggested that the National Payments Corporation of India might further extend its deadline to cap the market share at 30 percent by up to two years.
UPI’s Rampant Growth and Dominance
Nevertheless, unverified reports surfaced and claimed that NPCI is mulling increasing the market share cap of the third-party digital payment apps from 30 percent to over 40 percent, a few months after when reports in May 2024 claimed that NPCI might further extend its year-end deadline by up to 2 years. During the discussion of the Unified Payments Interface limit to hold the marker share cap, it is also pertinent to mention that last year the digital payment apps in India processed a total transaction of more than Rs 100 billion. Yes, you read that right, UPI payments last year surpassed the total transaction of Rs 100 billion where the major contributors were Phonepe and Google Pay. Continue reading this article for more details.
Last year, fintech giants Google Pay and Phonepe completely dominated the UPI ecosystem with their market share of 37.3 percent and 48.4 percent respectively. Moreover, the global fintech apps’ dominance in the Indian digital payments ecosystem was also flagged by a parliamentary panel recently this year. Reflecting on NPCI’s proposal to increase the market share cap, the founder and CEO of Phonepe, Sameer Nigam, said that it is one of the reasons that is refraining them from announcing their IPO, last month. This development comes at a time when the Indian government is striving to enforce the UPI in the world. Stay tuned to this website for more details and further updates.
Leave a Reply