Google Pay, PhonePe and Other UPI Payments Apps May Soon Impose Transaction Limit; Know Why

You could soon make limited numbers of payments through the third party payments apps including Google Pay and PhonePe.

Google Pay, PhonePe and Other UPI Payments Apps May Soon Impose Transaction Limit; Know Why

The National Payments Corporation of India (NPCI) could soon restrict you to make limited online payments using third-party UPI apps. ANI reported that NPCI would put the decision into practice by December 31, 2022. Millions of users who use platforms like Google Pay and PhonePe on a daily basis would be impacted by the limit cap because they wouldn't be able to process as many transactions as they want.

Platforms such as PhonePe and Google Pay currently have a large audience using their platforms, with over 80% market share. To control these platforms' dominance, NPCI has chosen a step that will limit the market cap to 30%, which now requires approval from the Reserve Bank of India. Notably, this could be implemented by the end of the year. There are currently no transaction limits for any user who pays via UPI.

According to the reports, a meeting was held to understand the current status of the scenario in a clear way. Senior officials from NPCI, the finance ministry, and RBI have marked their presence in the meeting, the reports quoted. However, no official statements have been made after the meeting.

The same directive to cap the number of transactions at 30% was initially presented by NCPI in 2020; however, the desired market cap was later exceeded and the UPI apps were given at least two more years to comply with the directive.

According to reports, PhonePe has already asked for a minimum three-year extension of the December 31 deadline, and some other players want a five-year extension. The uncertainty about the decision will be solved by the end of December.

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