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Can 30% market share cap on UPI ever be implemented?

The decision National Payments Corp of India (NPCI), India’s flagship payments processor. to check UPI’s growth by introducing a new rule that restricts TPAP (Third Party Application Providers) from going beyond 30% market share is bad for customers and payment apps.

March 31, 2021 / 02:51 PM IST
Hands using BHIM or Bharat Interface for Money app is a digital wallet by Indian Government loading on mobile phone. Editorial credit: lakshmiprasada S / Shutterstock.com

Hands using BHIM or Bharat Interface for Money app is a digital wallet by Indian Government loading on mobile phone. Editorial credit: lakshmiprasada S / Shutterstock.com

Unified Payments Interface (UPI) has been one of the best success stories worldwide. A complex multi-bank interoperable payment system made it easier for millions of users to pay each other using any UPI app.

Rough estimates peg the number of unique UPI users to around 120 million. But this still leaves close to 450 million smartphone users who are yet to experience UPI.

But the National Payments Corp of India (NPCI), India’s flagship payments processor, has decided to check UPI’s growth by introducing a new rule which restricts TPAP (Third Party Application Providers) from going beyond 30% market share.

The popular TPAPs are PhonePe (42% share currently) & Google Pay (36% share currently) while WhatsApp Pay and Amazon Pay are smaller players currently.