NPCI May Review Its Decision On 30% UPI Market Share Cap By Year End

The National Payments Corporation of India (NPCI) is likely to review its decision to implement a 30% cap on the market share of payment players offering Unified Payments Interface (UPI) services by the end of this year. 

As of now, the deadline to bring this change remains unchanged i.e., December 2024.

“The 30% cap on the transaction volume of payments players offering UPI services will be reviewed by the end of this year,” Business Standard reported, citing sources close to the matter.

In 2022 the 30% market share cap for UPI payment facilitating apps were proposed and the existing players back then were requested to restrict their market share to the mentioned limit within a two-year period. The move was aimed at encouraging the entry of new players into the ecosystem. 

The national payments regulatory body, recently, discussed the growth in the UPI sector with the relatively new fintech players. As a part of the discussion, the NPCI wanted the third-party payment apps to engage users through investments and incentives. 

As a part of this plan, new emerging players, including Groww, Flipkart, Slice and Fampay among others would plan to attract users and promote their in-house UPI services.

NPCI has been exploring several ways of boosting the digital payments ecosystem in India, especially UPI. 

In a bid to localise the use of UPI and penetrate deeper into the hyperlocal markets of the country, NPCI was reported to be planning the integration of BHASHa INterface for India (Bhashini), a government-backed AI-powered translation platform. This integration would allow users to make conversational payments in Indian languages.

Interestingly, this comes at a time when UPI transactions saw a dip both in terms of value and volume on a month-on-month basis in February 2024. 

According to NPCI, 1,210 Cr transactions were made via UPI in February as compared to 1,220 Cr transactions in January. The value of transactions fell to INR 18.28 Lakh Cr as compared to INR 18.41 Lakh Cr.

Meanwhile, the Indian payment infrastructure has already made its way outside the country with its entry into multiple nations including Nepal, France, New Zealand, etc.