NPCI Imposes 30% Cap on Transaction Volumes For UPI Apps

Nov. 6, 2020

In landmark developments that could have far-reaching impacts on digital financial transactions in the country, the National Payments Corporation of India (NPCI) on Thursdayallowed WhatsApp to roll out UPI serviceswhilst capping transaction volumes for third-party administrators (TPA) to 30%. While the former was a long time coming, the latter is a relatively unexpected announcement that might adversely affectGoogle PayandPhonePewhile helping other apps likePaytmandMobiKwik, among others.

According toNDTV Gadgets, the edict will most affect the two biggest UPI apps – Google Pay and PhonePe. Both account for around 40% of all UPI transactions each, while Paytm, MobiKwik and others make up for the remaining 20%. The government’s own UPI app, BHIM, is understood to have a minuscule share of the business. For now, there’s no word on what will happen if a particular app hits a cap, and if stopping all transactions by that app will increase the rate of failed transactions on the platform. Let’s hope we get some clarification from the NPCI on this matter sooner rather than later.

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