The National Payments Corporation of India (NPCI), which is the specialized branch of the Reserve Bank of India (RBI) in charge of the Unified Payments Interface (UPI), is in discussions with stakeholders in the industry and the Indian Government regarding the consequences of postponing its execution time frame for placing a limit on the market share of participants in the UPI ecosystem.
This came after the Bangalore-based digital payments and Financial Technology (FinTech) firm, PhonePe officially asked for the deadline in January 2023 to be postponed by a minimum of 3 years. According to a source, Google’s mobile payment service, Google Pay, has also spoken with the National Payments Corporation of India (NPCI) about the postponement.
The action by NPCI comes as India’s 2 leading online food ordering and delivery companies, Zomato and Swiggy, are considering joining the digital payments infrastructure of Unified Payments Interface (UPI) as 3rd party payments applications at the same time as NPCI’s action.
According to a Google Pay representative, they continue to be dedicated to abiding by the rules of the nation, even if they feel that at this point, involvement in the Unified Payments Interface (UPI) will encourage innovations and expansions rather than constrain it, as they feel the market cap may do.
As per information from the NPCI, Google Pay has a 34% market share with 2.2 billion payment transactions. PhonePe had a 48% share in the market with around 3.14 billion UPI transactions in August. WhatsApp Pay had a 1% market share in the UPI ecosystem, with 6.72 million payment transactions in August. Every month, Google Pay and PhonePe account for nearly 80% of all digital payments. The NPCI has established a cap of just 30% share in the market for all firms involved in digital payments.
According to sources, proposals have also been made to push back the execution schedule to 5 years. However, the NPCI is in consultation with the authorities and is eager to learn better regarding its ramifications. As of right now, even though WhatsApp Pay has been permitted to expand to a user base of 100 million, there were no changes in UPI’s market share supremacy.
This month, T Rabi Sankar, the Deputy Governor of the Reserve Bank of India (RBI), stated that they are seeking to tackle and resolve concerns regarding the duopoly established by 2 major players in the UPI ecosystem, Google Pay and PhonePe.