Google Pay, PhonePe and other third-party UPI apps to face 30 percent caps on all transactions

If you use UPI payment apps like Google Pay, PhonePe, Paytm, or any third-party UPI payment app, this news will concern you. The National Payments Corporation of India (NPCI) has introduced a 30 percent cap on all payments made via UPI apps. Basically, the NPCI has put a limit on all the transactions processed via a single company, in order to “address the risks and protect the UPI ecosystem as it further scales up.”

The new rule will be applicable from January 2021. Those services that have a share of more than 30 percent of the transaction volumes will be allowed a period of two years to comply with the rules. The new law comes just a day before WhatsApp is allowed to carry on transactions via WhatsApp Pay on its platform. The law is applicable to all third-party applications processing UPI payments, including bank apps too.

30 percent cap on all UPI payments

The new law makes it tough for popular UPI payment apps such as Google Pay and PhonePe. Both these services each account for 40 percent of the total market share. This means that both Google Pay and PhonePe have to look for ways to reduce the number of transactions made on their platform in order to comply with the law.

phonepe app, Yes Bank Impact

This gives a very good chance for other apps to improve their business, given that users of Google Pay and PhonePe will now have to look for other services in order to make the payments. Ever since its introduction, more consumers in India have started using the UPI method of payments.

Paytm and Mobikwik have shares of 20 percent combines, which gives them an opportunity to increase their share. Meeting the 30 percent cap alone for these services will see massive growth in the transactions processed by them. This could also translate to more business for BHIM and other bank apps that barey hold any share in the current scenario.

What does it mean for customers?

If you rely on Google Pay or PhonePe mostly for your UPI-based transactions, you will frequently see transaction failures. However, you will have a better chance fo making the payment via other unpopular services such as BHIM and bank apps.

 



source https://www.bgr.in/apps/google-pay-phonepe-and-other-third-party-upi-apps-to-face-30-percent-caps-on-all-transactions-922910/

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