Google Pay, PhonePe, other UPI apps may impose transaction limit, Know why

The UPI apps like Google Pay, PhonePe, and others might impose a limit on UPI transactions. The National Payments Corporation of India (NPCI) is reportedly in talks with the Reserve Bank on implementation of its proposed December 31 deadline for limiting the volume cap of players to 30 per cent.

Google Pay and PhonePe hold a market share of about 80 per cent. As of now, there’s no cap on volume. So, NPCI wants to avoid concentration risk in November 2022 by implementing a 30 per cent volume cap for third-party app providers (TPAP).

A meeting took place between the NPCI and Reserve Bank to comprehensively look at all aspects. Senior officials of the finance ministry and RBI also participated in this meeting alongside NPCI officials. However, No final decision has been taken to extend the December 31 deadline as the NPCI is evaluating all the possibilities.

Currently, no final decision has been made to extend the December 31 deadline because the NPCI is evaluating all options. NPCI is likely to decide on the issue of UPI market cap implementation by this month-end.

Meanwhile, the Central government had recently said that UPI is convenient and that there were no plans to put any charges on it.

In 2020, NPCI issued a directive capping the share of transactions that a third-party application provider could process at 30 per cent of the volume of transactions handled on UPI, effective January 1, 2021, to be calculated based on the volume of transactions processed in the previous three months.