UPI share to be capped at 30 percent: NPCI to review its decision by year-end, says report

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Unified Payments Interface (UPI) services by the end of 2024, reported Business Standard. As of now, the deadline to bring this change remains unchanged i.e., December 2024. “There is still time for it.

The 30 per cent cap on the transaction volume of payments players offering UPI services will be reviewed by the end of this year," said a person, who requested he not be named. ALSO READ: Cracking the code: How to master UPI fraud management? MintGenie explains In March, the NPCI met with new UPI players and discussed how UPI could grow. In November 2022, National Payments Corporation of India had proposed a 30 per cent volume cap on third party application providers.

It asked UPI players to limit their market share to 30 per cent in two years. Two entities PhonePe and Google Pay, have nearly 86 per cent of the UPI market share in terms of transaction volumes, NPCI data shows. These two hold 48.3 per cent and 37.6 per cent share, respectively.

Paytm Payments Bank, which is the distant third, is way behind and significantly, its market share fell after the Reserve Bank of India (RBI) imposed restrictions on it in January this year. The next two, Cred and Axis Bank Apps, have less than one per cent each of market share. ALSO READ: Flipkart launches digital payments service Flipkart UPI Paytm processed 1.23 billion transactions in March, down from 1.57 billion in January 2024.

The firm had a 9 per cent market share in UPI as of March this year. Fintech firms are not investing in the UPI ecosystem simply because transactions are free and do not levy a merchant discount code (MDR). Large fintech firms invested and found UPI to be a tool to acquire new customers.