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India’s National Payments Corporation of India (NPCI), which has the regulatory mandate to oversee retail payments and settlement systems in the country, is likely to “delay caps on market share” for the popular instant real-time payment system Unified Payment Interface (UPI), extending the deadline by as much as two years. Earlier, NPCI had set an end-2024 deadline for implementing a 30% market share cap for companies processing payments through the UPI, according to a report by Reuters media agency. The deadline extension is expected to benefit mobile payment platforms like Walmart-backed (NASDAQ: WMT) PhonePe and Google Pay (NASDAQ: GOOGL), which currently dominate the digital payments market in India with a market share of 48.3% and 37.4% respectively. UPI, the most popular digital payment method in India, processes over 11 billion transactions every month. UPI’s popularity in digital payments has grown since its introduction in 2016 with almost all digital wallets and online payment apps in India incorporating it. NPCI originally announced the 30% cap in 2020 but extended the deadline to the end of 2024. The deadline is likely to be extended again, and the final decision will be announced closer to the deadline, the Reuters report said. UPI does not charge anything from the merchants, unlike credit card users like Mastercard (NASDAQ: MA) and Visa (NASDAQ: V), who charge merchants a fee for customer transactions. As a result, Mastercard’s chief financial officer, Sachin Mehra, reportedly said last year that India’s UPI is “fantastic at many levels” but “is an incredibly painful experience for ecosystem participants who all end up losing money as part of that proposition.” Expanding UPI’s reach Earlier this month, the Reserve Bank of India (RBI) met major stakeholders in the UPI ecosystem—including banks, NPCI, third-party application providers, and technology service providers—to discuss potential strategies for further expanding the reach of UPI. “There were wide ranging discussions…

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Filed under: News - @ May 22, 2024 6:16 am