Home Business NPCI holds talks with RBI on proposed December 31 volume cap deadline

NPCI holds talks with RBI on proposed December 31 volume cap deadline

National Payments Corporation of India (NPCI), which runs the digital pipeline, is in talks with the Reserve Bank on implementation of its proposed December 31 deadline for limiting the volume cap of players to 30 per cent.

At present, there is no volume cap. So, two players — Google Pay and PhonePe — account for a market share of about 80 per cent.

in November 2022 had proposed a 30 per cent volume cap for third-party app providers (TPAP) in a bid to avoid concentration risk.

In this regard, sources said, a meeting was convened to comprehensively look at all aspects. Besides officials, senior officials of the and RBI also participated in this.

At the moment, is evaluating all the possibilities and no final decision has been taken to extend the December 31 deadline, the sources said.

NPCI has also received representations from industry stakeholders to extend the deadline and they are being examined, they added.

According to the sources, NPCI is likely to decide on the issue of market cap implementation by this month-end.

NPCI in 2020 came up with a directive to cap the share of transactions a third-party application provider (TPAP) could process at 30 per cent of the volume of transactions handled on UPI, effective January 1, 2021, which is to be calculated on the basis of the volume of transactions processed during the preceding three months.

However, it gave the existing TPAPs, such as PhonePe and Google Pay, which exceed the desired market cap, two additional years, starting next year to comply with the directive.

Earlier this year, the (RBI) came out with a consultation paper on charges in payment systems, which made a case for a tiered charge to be imposed on transactions in line with Immediate Payment Service (IMPS) transactions.

The government later issued a statement noting that UPI is a digital public good with immense convenience and productivity gains for the economy, and there are no plans to levy any charges for UPI services.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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