NPCI yet to decide on imposing 30% UPI market share cap by 2024 end

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The National Payments Corporation of India (NPCI) is yet to decide on whether it will implement a 30 per cent cap on the market share of payment players offering Unified Payments Interface (UPI) services by the end of 2024, MD & CEO Dilip Asbe said on Tuesday.

“The decision is yet to be taken. I don’t think I can comment on that (imposition of 30 per cent cap),” he said.

“We have started seeing more app providers coming into play. Now, all leading banks, including SBI (Yono app), have modified their apps to be UPI apps. Obviously it is going to take time, we are aware about that,” he added.

Market domination

Two payment apps—PhonePe and Google Pay—continue to dominate the UPI market share, and had over 85 per cent of the UPI market share in terms of transaction volumes in October, according to NPCI data. Paytm, the third largest UPI payment app in terms of volume, had 7 per cent market share in October, while players below the third position had market share of less than 1 per cent.

40 per cent cap

According to a report by TechCrunch, as the top two players continue to dominate overall UPI market share, the NPCI is considering to increase the market share that UPI operators are allowed to hold to more than 40 per cent. The NPCI had first proposed a 30 per cent market cap for third-party app providers in November 2020, and later extended the deadline from December 2022 to December 2024.

India’s home-grown Unified Payments Interface (UPI) technology hit a new record in October, with a total of 16.58 billion transactions amounting to ₹23.50 lakh crore, according to data shared by the National Payments Corporation of India (NPCI). Festival season spending aided the 45 per cent year-on-year (y-o-y) rise in October UPI transactions.

Data from previous months show that person-to-person (P2P) mode of payment account for the chunk of overall UPI transaction value, followed by person-to-merchant (P2M) transfers. State Bank of India (SBI), HDFC Bank and YES Bank are the top remitter and beneficiary banks on the UPI ecosystem.