NPCI Holds Talks With RBI On Proposed December 31 Volume Cap Deadline
NPCI in November 2022 had proposed a 30 per cent volume cap for third-party app providers (TPAP) in a bid to avoid concentration risk
National Payments Corporation of India (NPCI), which runs the UPI digital pipeline, is in talks with the Reserve Bank of India (RBI) on implementation of its proposed December 31 deadline for limiting the volume cap of players to 30 per cent, reported by the PTI.
Currently, there is no volume cap. So, two players, Google Pay and PhonePe, account for a market share of about 80 per cent.
According to the report, NPCI in November 2022 had proposed a 30 per cent volume cap for third-party app providers (TPAP) in a bid to avoid concentration risk.
A meeting was convened to comprehensively look at all aspects in this regard, sources told PTI. Besides NPCI officials, senior officials of the finance ministry and RBI also participated in this. At the moment, NPCI is evaluating all the possibilities and no final decision has been taken to extend the December 31 deadline, the sources said.
NPCI has also received representations from industry stakeholders to extend the deadline and they are being examined, they added.
According to the sources, NPCI is likely to decide on the issue of UPI market cap implementation by this month-end. NPCI in 2020 came up with a directive to cap the share of transactions a third-party application provider (TPAP) could process at 30 per cent of the volume of transactions handled on UPI, effective January 1, 2021, which is to be calculated on the basis of the volume of transactions processed during the preceding three months.
However, it gave the existing TPAPs, such as PhonePe and Google Pay, which exceed the desired market cap, two additional years, starting next year to comply with the directive.
Earlier this year, the Reserve Bank of India (RBI) came out with a consultation paper on charges in payment systems, which made a case for a tiered charge to be imposed on UPI transactions in line with Immediate Payment Service (IMPS) transactions.
The government later issued a statement noting that UPI is a digital public good with immense convenience and productivity gains for the economy, and there are no plans to levy any charges for UPI services.
Top Headlines
