Unified Payments Interface (UPI) payments across apps like Google Pay, Paytm and PhonePe do not have any transaction limit in India now, but it may soon change as the National Payments Corporation of India (NPCI) has proposed December 31 deadline to limit the volume cap for third-party UPI app providers (TPAP), says a report by news agency ANI.
This means the monopoly of UPI payments apps Google Pay, PhonePe and Paytm which collectively dominate the market with an 80 per cent share, is set to end.
In an attempt to end the monopoly of any UPI app, the NPCI has sent a proposal of a 30 per cent volume cap, which the organisation wants the Reserve Bank of India (RBI) to approve. According to a report by news agency PTI, the NPCI is likely to decide on the issue of UPI market cap implementation by this month-end. The NPCI received representations from industry stakeholders to extend the deadline.
UPI has become a popular payment method in the country and the Unified Payments Interface platform processed 7.3 billion transactions in the month of October, a record high as India witnessed a bumper festive season. According to NPCI, UPI processed 7.3 billion transactions worth Rs 12.11 trillion in October.
The volume was up 73 per cent while the value of transactions was up 57 per cent (year-over-year). Launched in 2016, UPI crossed 1 billion transactions in October 2019. Nearly 76 per cent Indians now prefer using UPI during online checkouts while more millennials (84 per cent) are now using UPI when shopping online, a recent report said.
In 2021, UPI enabled 3,900 crore financial transactions valuing USD 940 billion, which is equivalent to approximately 31 per cent of India's GDP. UPI is amongst the most successful real-time payments (RTP) systems globally, providing – simplicity, safety, and security in P2P and P2M transactions in India.