India’s decision to delay market share caps for unified payments interface (UPI) services will offer a reprieve to dominant players like Google Pay and Walmart-backed PhonePe. Initially scheduled to take effect by the end of 2024, the cap’s implementation has been postponed until December 2026, according to a statement from the National Payments Corporation of India (NPCI).
The proposed rule, announced in November 2020, limits any single digital payment firm to 30% of UPI transaction volumes. PhonePe and Google Pay, which collectively processed 13.1 billion transactions in November 2024, significantly exceed this threshold. Recent data shows PhonePe holding 47.8% of the UPI market share, while Google Pay controls 37%.
The NPCI’s decision aims to avoid stifling the UPI ecosystem’s growth while allowing newer players like Paytm, Navi, Cred, and Amazon Pay to expand their market presence. “The delay is intended to balance ecosystem growth with fostering competition,” said a person familiar with the discussions, who requested anonymity due to restrictions on speaking to the media.
In a related move, NPCI removed restrictions on onboarding users for WhatsApp Pay, which had been gradually entering the competitive UPI landscape.
The NPCI’s announcement underscores its commitment to maintaining UPI’s momentum as a global leader in digital payments while encouraging innovation and competition within the sector.
