Paytm shares fell over 3% on January 1 as the National Payments Corporation of India has extended the cap on volumes processed by Unified Payments Interface (UPI) applications by two more years to December 2026.
The move will benefit Google Pay and Walmart-backed PhonePe.
According to the proposal, first made in November 2020, digital payment firms would not be allowed to hold more than 30% share of the volume of transactions processed via UPI.
At 10:15 am on January 1, Paytm shares were trading 3.5% lower at Rs 983 apiece. The market capitalisation of the stock is Rs 62,626 crore. Its 52-week low is Rs 310 and 52-week high is Rs 1,063. The stock was among top losers on BSE Midcap index on January 1.
Google Pay and Walmart-backed PhonePe are the two most widely used apps in India to make UPI payments. Other players include fintech companies such as Paytm, Navi, Cred and Amazon Pay.
PhonePe's share of UPI payments stood at 47.8% in November 2024 while Google Pay's share was at 37%, according to regulatory data. The two firms processed a combined 13.1 billion transactions in November, the data showed.
The mandate, which was to take effect from the end of 2024, will now kick in at the end of December 2026, according to a statement from NPCI.
NPCI, an initiative of the Reserve Bank of India (RBI) and the Indian Banks’ Association, is an umbrella organisation for operating retail payments and settlement systems in India (IBA).
NPCI governs the Unified Payments Interface (UPI) framework in India.
The NPCI also lifted a cap on WhatsApp Pay's UPI product onboarding users.
With inputs from Reuters
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