The National Payments Corporation of India (NPCI) has announced an extension for the implementation of the 30% market share cap for third-party app providers (TPAPs), such as PhonePe and Google Pay.
The new deadline is December 31, 2026, marking the second postponement of the regulation initially proposed in November 2020.
This regulation was introduced to curb market dominance by any single player and to ensure a competitive and equitable UPI ecosystem.
The initial deadline of December 31, 2022, was first extended to December 31, 2024. Now, TPAPs exceeding the 30% volume cap have been granted an additional two years to comply.
Relief for Market Leaders
The move comes as a relief for market leaders PhonePe and Google Pay, which each currently command more than 30% of the UPI transaction market.
The extension provides these players more time to adapt to the new rules without disrupting their operations or user experiences.
WhatsApp Pay Gains Unrestricted Access
In a parallel development, the NPCI has lifted the cap on user onboarding for WhatsApp Pay.
The Meta-owned platform can now offer UPI services to its entire user base in India without phased limitations, enhancing competition in the rapidly growing UPI payments sector.
Previously, WhatsApp Pay was allowed to onboard users incrementally, adhering to restrictions aimed at maintaining balance in the UPI ecosystem.
The removal of this cap positions WhatsApp Pay to compete on a level playing field with established leaders while adhering to existing UPI guidelines and regulations.
UPI Transactions on a Steady Rise
The changes come as UPI transactions continue their upward trajectory. In November alone, transaction volumes reached 15.48 billion, a 37% year-on-year increase.
With such growth, UPI is further cementing its role as a cornerstone of India’s digital payments infrastructure.
Global and Domestic Push for UPI Adoption
Efforts to expand UPI’s reach both domestically and internationally remain a focus.
India is in active talks with several countries to enable cross-border UPI payments, while the Reserve Bank of India (RBI) has introduced measures to strengthen the digital payments ecosystem.
Notably, the RBI recently allowed fully KYC-compliant prepaid wallets to conduct UPI transactions via third-party apps, adding further convenience for users.
