Google Pay and other UPI apps get new SOP: Now Volume Restictions By NPCI

Highlights:

  • The National Payments Corporation of India has set out new guidelines for digital payments.
  • NPCI has also created an elaborate three-tier structure to ensure compliance.
  • The non-compliant UPI players will provide an undertaking to the NPCI explaining their efforts towards it.

The National Payments Corporation of India has set out new guidelines for digital payment apps limiting their share in the overall volume of transactions on the unified payment interface at 30% of the total volume of transactions in India.

The limit of 30% will be calculated on the basis of the total volume of transactions processed on UPI during the preceding three months by a player, on a rolling basis, starting 1 January 2021.

They also created a three-tier structure for the proper implementation of the new guidelines. Also, existing players with higher market share, in terms of volume of transactions, will have two years to comply with the directives.

NPCI Three- Tier Structure for UPI Apps like Google Pay

NPCI has also created an elaborate three-tier structure to ensure compliance. The NPCI says that the systems are designed in such a way that the current users are not impacted.

1. Apps will touch Level 1 when their market-share reaches 25-27% and will be sent an alert, which they must acknowledge.

2. They’ll touch Level 2 when their market share is between 27.1% and 30%, and at this point, the apps must take steps to bring down their market share, and then share them with the regulators.

3. Level 3, or above 30% market share — at which PhonePe and Google pay are at currently — requires apps to stop onboarding new users.

The UPI players that already had a market share of more than 30 percent, namely Google Pay and PhonePe, before the regulation came into effect this year, have two years to comply with the policy. The NPCI will review its compliance on a half-yearly basis from January 2022 onwards.

This guideline ensures that UPI will not be dependent on any single player. Paytm has been the largest digital payments platform, processing over 1.2 billion transactions monthly. It provides all digital types of payment methods, including wallet, UPI, cards, and banking services.”

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