PhonePe, Google Pay and other UPI apps may apply a daily transaction limit | Figure

PhonePe, Google Pay, and other UPI apps may enforce a daily transaction limit

A recent report by IANS states that the National Payments Corporation of India (NPCI) is currently in discussions with the Reserve Bank of India (RBI) to impose transaction limits on UPI apps like Google Pay, PhonePe and others. As a result, users will only be able to make limited transactions on these apps on a daily basis. The NPCI is responsible for managing the UPI digital pipelines and aims to reduce player volume to 30% by December 31st.

Why does the NPCI want to set a daily transaction limit?

The IANS report claims that PhonePe and Google Pay account for 80% of the market share. In an effort to reduce concentration risk, meaning the level of risk that arises when all the eggs are in one basket, so to speak, NPCI now wants to reduce it to 30%. This will likely also give other players a chance to thrive by breaking the monopoly held by first movers.

The meeting took place between the NPCI, senior RBI members and senior finance ministry officials to ascertain steps that can be taken in the near future. At present, there is no indication that the proposed December 31 deadline needs to be moved. Additionally, the NPCI will reveal its market share implementation decision by the end of November, which should bring further clarity on how the new regulations will actually impact customers.

Previous limits set by NPCI

The NPCI has issued a similar directive in the past, limiting the share of transactions to 30% of total UPI transactions. This meant that third-party application providers could only process 30% of these transactions. The directive entered into force on 1 January 2021 and was calculated based on the volume of transactions processed in the previous quarter.

With many apps like Youtube accepting UPI payments and Whatsapp integrating their payment processes, the UPI transaction limit could be hampering their expected revenue.

Kajoli Anand Puri

On me: Kajoli is a tech enthusiast with a penchant for smart cooking and home appliances. He loves exploring gadgets and gizmos designed to make life easier, but he also secretly fears a world run by artificial intelligence. Oh wait, we’re already there.
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Tags:

The Reserve Bank of India is looking into creating limits for UPI transactions. UPI apps like Google Pay
PhonePe
and others will suffer. Users will only be able to make limited transactions on these apps on a daily basis

#PhonePe #Google #Pay #UPI #apps #apply #daily #transaction #limit #Figure

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