Cap on transaction volumes may hurt adoption of UPI: Google Pay
The NPCI on November 5 capped UPI transactions by a Third Party App Provider (TPAP) at 30 percent of the market share.
November 07, 2020 / 10:36 AM IST
Google Pay has said the policy to cap total volumes of Unified Payments Interface (UPI) payments by a platform could affect adoption of UPI.
The National Payments Corporation of India (NPCI) on November 5 capped UPI transactions by a Third Party App Provider (TPAP) at 30 percent of the market share. NPCI had also given regulatory approval to Facebook-owned WhatsApp Pay.
A Google Pay executive has hinted that the policy should be reconsidered, according to a statement cited by Mint.
"Digital payments in India is still in its infancy, and any interventions at this point should be made with a view to accelerating consumer choice and innovation," Sajith Sivanandan, business head, Google Pay and Next Billion User initiatives, India.
"A choice-based and open model is key to drive this momentum. This announcement has come as a surprise and has implications for millions who use UPI for their daily payments and could impact the further adoption of UPI and the end goal of financial inclusion," he said.
The new rule will particularly impact Google Pay and PhonePe, who each have a market share of over 40 percent each, as per the Mint report.
"We want to assure all our customers and merchants that there is absolutely no risk of any UPI transactions on PhonePe failing," PhonePe founder Sameer Nigam said.
NPCI's new rule comes into effect from January 1, 2021, and existing TPAPs who exceed the limit on market share have two years to comply with the norms.