UPI 30% Cap - All third-party UPI apps from next year January 2021

30% cap on volume for all third-party apps offering UPI:

National Payments Corporation of India (NPCI), the body that operates the widely popular UPI payments infrastructure, said Thursday evening that it will enforce a cap to ensure that no single payments app processes more than 30% of UPI transactions in a month.

The payments body said the move is aimed at addressing the “risks” and “protecting the UPI ecosystem as it further scales up.” The change goes into effect in January 2021.

UPI is a payments infrastructure built by large banks in India and is backed by the Indian government. It has become the most popular digital payments method in the country in recent years.

The cap of 30% will be calculated based on total volume of UPI transactions processed in the preceding three months, it added.

The move, described by an industry executive as the most absurd thing they have heard in months in India, will severely impact Google and Walmart, whose respective apps already process more than 35% of UPI transactions each.

In fact, Walmart’s PhonePe processed more than 40% of about 2 billion transactions on UPI network last month.

It remains unclear how any payments app will comply with this limit. Let’s say PhonePe or Google Pay has already processed about 650 million transactions in three weeks. Would it just switch off UPI payments on their app for the remainder of the month?

NPCI circular - https://www.npci.org.in/PDF/npci/upi/circular/2...