NPCI Eases UPI Volume Cap, Extends Deadline for TPAPs

The National Payments Corporation of India (NPCI) has extended a deadline for enforcing a 30 per cent transaction volume cap on third-party Unified Payments Interface (UPI) apps until December 31, 2026. This extension, the third of its kind, affects major players like Google Pay and PhonePe, which currently dominate UPI transactions.

In a notable move affecting key players like PhonePe and Google Pay, the National Payments Corporation of India (NPCI) has granted a two-year extension on the deadline to enforce a 30 per cent volume cap on third-party Unified Payments Interface (UPI) apps. This extension extends the deadline until December 31, 2026.

This marks the third time NPCI has postponed the cap's implementation. Initially proposed in November 2020, the cap was meant to regulate the transaction volume to 30 per cent for major third-party application providers (TPAPs), granting existing players a two-year window to comply.

Presently, giants like Google Pay and PhonePe account for 80 per cent of UPI transactions. NPCI, which operates UPI for real-time payments in India, calculates the 30 per cent cap based on the transaction volume over a rolling three-month period. To align with the cap, TPAPs exceeding it may need to halt new customer onboarding. Separately, NPCI has removed the user cap on WhatsApp Pay, enabling it to extend UPI services to its full user base.

(With inputs from agencies.)