NPCI Said to Be in Talks With RBI on 30 Percent UPI Volume Cap Deadline

National Payments Corporation of India (NPCI), which runs the UPI digital pipeline, is in talks with the Reserve Bank on implementation of its proposed December 31 deadline for limiting the quantity cap of gamers to 30 %. At current, there isn’t a quantity cap. So, two gamers, Google Pay and PhonePe, account for a market share of about 80 per cent. NPCI in November 2022 had proposed a 30 % quantity cap for third-party app suppliers (TPAP) in a bid to keep away from focus danger.

In this regard, sources stated, a gathering was convened to comprehensively take a look at all elements. Besides NPCI officers, senior officers of the finance ministry and RBI additionally participated on this.

At the second, NPCI is evaluating all the probabilities and no remaining choice has been taken to increase the December 31 deadline, the sources stated.

NPCI has additionally obtained representations from trade stakeholders to increase the deadline and they’re being examined, they added.

According to the sources, NPCI is more likely to resolve on the difficulty of UPI market cap implementation by this month-end.

NPCI in 2020 got here up with a directive to cap the share of transactions a third-party software supplier (TPAP) may course of at 30 % of the quantity of transactions dealt with on UPI, efficient January 1, 2021, which is to be calculated on the premise of the quantity of transactions processed in the course of the previous three months.

However, it gave the present TPAPs, resembling PhonePe and Google Pay, which exceed the specified market cap, two extra years, beginning subsequent yr to adjust to the directive.

Earlier this yr, the Reserve Bank of India (RBI) got here out with a session paper on expenses in cost methods, which made a case for a tiered cost to be imposed on UPI transactions in keeping with Immediate Payment Service (IMPS) transactions.

The authorities later issued an announcement noting that UPI is a digital public good with immense comfort and productiveness good points for the financial system, and there aren’t any plans to levy any expenses for UPI providers.