India weighs delaying caps on UPI market share in win for PhonePe, Google Pay | TechCrunch

India weighs delaying caps on UPI market share in win for PhonePe, Google Pay | TechCrunch

India's mobile payments regulator is likely to extend the deadline to impose market share caps on popular UPI payments rail by one to two years, sources familiar with the matter told TechCrunch.

The National Payments Corporation of India (NPCI), a special unit of the Reserve Bank of India, plans to extend the deadline for introducing a 30% cap on the market share of individual UPI ecosystem participants, sources said.

The decision is expected to benefit Google Pay and Walmart-owned PhonePe, which currently dominate the market for UPI payments in the country.

UPI has become the most popular way to send and receive money and make payments in India, and the channel sees more than 11 billion transactions every month. PhonePe currently holds around 49% market share by volume, followed by Google at 37.4%. Paytm, its closest competitor, has seen its share drop from 11 percent to 8 percent at the end of last year. Amid regulatory challenges.

NPCI had initially planned to implement the market share cap in January 2021, but The deadline has been postponed to January 1, 2025.. TechCrunch previously reported that the regulator was moving to extend the deadline further after concluding that there was There is no practical solution to this problem..

Sources cautioned that NPCI is yet to reach a final decision and may make changes to its plan by the end of the year.

An NPCI spokesperson declined to comment on all market share queries.

The decision may draw criticism from other ecosystem players who are urging the NPCI to live up to its commitment. Some companies have proposed solutions, e.g Incentives that benefit small players..

A parliamentary panel had also asked New Delhi in February. Challenge the dominance of PhonePe and Google Pay.. “As India, focusing on 'Make in India' in other sectors, the committee is of the view that local enterprises should be promoted in the fintech sector,” the parliamentary panel wrote.

However, several UPI providers admit that an incentive plan that unfairly discriminates against PhonePe and Google Pay would be bad for the ecosystem, and could send the wrong signal to the investor community.

US-based investors including Accel, Lightspeed, Tiger Global, Insight Partners, Invesco, Vanguard, BlackRock and Fidelity are among the most prominent investors in Indian public firms and startups. There are some choices made by RBI and other regulators. Already scared off many investors.

RBI A meeting was held on Wednesday Regular said to discuss strategies with key players in the UPI ecosystem to scale UPI infrastructure, expand product portfolio, address challenges in the ecosystem and brainstorm solutions to address these issues. Took

Indian News Outlet Money Control First reported (paywalled) that NPCI is considering another extension of the deadline.

The market share dilemma is not the only challenge facing NPCI and RBI. Regulators have also discussed introducing more incentives for UPI service providers. Unlike credit card issuers such as MasterCard and Visa, which charge merchants a fee for consumer transactions, UPI — set up seven years ago by a consortium of banks — is largely free of charge for merchants. Price works.

India's UPI is “fantastic on many levels”, but one “An incredibly painful experienceMasterCard CFO Sachin Mehra said last year that “ecosystem participants who will lose money as part of this proposal.”

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