Till the relief of PhonePe and Google Pay, NPCI extends the UPI market cap deadline to December 31, 2024.
To prevent the concentration of UPI volumes in the hands of a few competitors, rules requiring each UPI third-party app to adhere to a 30 percent transaction volume cap were initially established in November 2020.
Approximately 96 percent of monthly UPI volumes are currently controlled by three players: PhonePe, Google Pay, and Paytm.
The timelines for compliance of current TPAPs who are exceeding the volume cap are extended by two (2) years, or until December 31, 2024, to comply with the volume cap, according to a statement from NPCI. "Taking into account the present usage and future potential of UPI, as well as other relevant factors," the statement read.
Prior to that date, December 31, 2022, all players had to have a share of at least 30% in monthly UPI volumes. This was the deadline set by NPCI.
"Considering the current and prospective future use of UPI, as well as other pertinent circumstances, the deadlines for compliance with existing In terms of volume for the month of October, PhonePe had a market share of 47%, according to the most recent app-wise data from NPCI. During the month, Google Pay accounted for 34% of the volumes and Paytm for 15%.
As customers have opted to remain with one of the top three apps for UPI transactions, other players like Amazon Pay, WhatsApp Pay, etc. currently have a tiny percentage.
Even while the market cap may be a negative for PhonePe and Google Pay, Paytm may benefit since it may receive a higher part of volumes if the guideline is put into place.
After NPCI announced it would enforce a 30 percent market cap, concerns arose over how UPI players could reduce their market share, essentially casting doubt on the feasibility of putting these rules into reality. The top three players have continued to be unquestioned, and UPI has had remarkable development since the announcement.
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