Highlight
- NPCI is in talks with RBI on a volume cap limit of 30 per cent.
- Currently, there is no quantity cap, and Google Pay and PhonePe account for over 80 per cent of all digital payments.
- NPCI had earlier proposed a 30 per cent volume cap for third party app providers (TRAPs).
The option of using Unified Payments Interface (UPI) payment apps for seamless transactions seems to be going away soon, if NPCI has its way. The National Payments Corporation of India (NPCI), which manages the Unified Payments Interface digital pipeline, and the Reserve Bank are now discussing NPCI’s proposed deadline of December 31 to impose volume caps for third-party players such as Google Pay and PhonePe. have been Percentage of all UPI transactions.
NPCI’s proposed deadline: What does it mean?
This means that any UPI player including Google Pay or PhonePe will not be allowed to process more than 30 per cent of the total transactions through the UPI interface after December 31.
There is currently no volume cap, and Google Pay and PhonePe accounts for over 80 percent of all digital payments.
According to a report, key officials of RBI and Finance Ministry will attend a meeting which has been organized to examine all the factors. NPCI is considering all options, but no decision has been taken to extend this deadline till December 31.
Earlier, NPCI had proposed a 30 per cent volume cap for third party app providers (TRAPs) from January 2021 to avoid the risk of concentration. However, existing TPAPs, such as PhonePe and Google Pay, were given two more years to comply with the orders.
The RBI had earlier this year released a consultation paper on charges in payment systems, making a case for levying a levelized charge on UPI transactions on the lines of Immediate Payment Service (IMPS) transactions. The government also said that UPI is convenient and has no plans to levy charges on it.