UPI, Digital Jobs: Govt Extends 30 Percent Cap Deadline
The National Payments Corporation of India (NPCI) on Friday extended the deadline for UPI third-party players to meet the target of 30 percent in digital payments by two years to December 2024.
The decision may provide relief to third-party app providers (TPAP) like Google Pay and Walmart’s PhonePe which have a large share in UPI-based transactions.
NPCI uses the Unified Payments Interface (UPI) which is used for real-time payments between peers or end merchants while shopping.
In November 2020, NPCI had announced that it would limit one third-party app to handle only 30 percent of UPI transaction volumes. The cap was to take effect on January 1, 2021.
However, TPAPs (which will expire on November 5, 2020) that have exceeded the threshold have been given two years to comply with the norms in a phased manner.
“Considering the current and future use of UPI, and other relevant factors, the compliance periods for existing TPAPs exceeding the volume limit, are extended by two (2) years i.e. up to December 31, 2024, to comply with the volume limit,” NPCI said It’s a circle.
NPCI also said that due to the huge potential of digital payments and the need for multiple penetration from its current status, it is important that other existing and new players (banks and non-banks) increase their level of consumer access to UPI growth and achieve overall market equity.
TPAPs typically interface with banks at the end to add users and process their payments.
It was reported last month that NPCI plans to propose that the Central Bank implement a deadline of December 31, 2023, to reduce the capacity of players to 30 percent. It should be noted that there is currently no volume limit, resulting in Google Pay and PhonePe accounting for about 80 percent of the total market.
