The National Payments Corporation of India (NPCI) UPI new customers has instituted a new rule that caps the proportion of any third-party payment wallet in UPI transactions at 30% in an attempt to control the industry and reduce risks related to high transaction volumes. Reducing monopolistic practices and fostering a positive competitive climate are the goals of this action.
Details of the New Regulation
This law was originally scheduled to go into effect in December 2022, UPI new customers but it was delayed to give big third-party app providers (TPAPs) like Google Pay and Walmart’s PhonePe more time to adapt. These platforms, which presently control the majority of the market, will now have until December 31, 2024, to modify their transaction shares for them to comply with the new regulations by January 1, 2025.
Current Market Scenario
At the moment, PhonePe and Google Pay account for an enormous 85% of UPI-based transactions. Because so much power is concentrated in the hands of a small number of players, there is a serious risk that any operational glitch might cause the entire payment system to become unstable. Therefore, the goal of the new NPCI order is to protect the ecosystem of digital transactions from these kinds of threats.
Potential Methods for Reducing Market Share
Although NPCI has not yet published comprehensive rules on how these businesses should decrease their market shares, potential tactics could include forbidding these apps from obtaining new
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