As domestic companies and global giants alike jockey for their place in India’s burgeoning payments market, the entities responsible for oversight continue to try to keep any one company from dominating the space.
Last week, the National Payments Corporation of India (NPCI) said it was issuing a cap that would limit any one “third party app provider” to processing no more than 30% of the total transaction volume that crosses its Unified Payments Interface (UPI).
NPCI operates several domestic retail payments systems in India, including UPI, which enables the transfer of funds between accounts using mobile devices. UPI currently processes about 2 billion transactions a month, it said.
The organization said the cap, which would take effect beginning January 1, “will help to address the risks and protect the UPI ecosystem as it further scales up.”
NPCI said that existing companies that exceed the cap will need to comply “in a phased manner” within two years from the January effective date.
According to TechCrunch, Google Pay and Walmart’s PhonePe each already process more than 35% of transactions on UPI. Last month, Google was at about 38% of UPI transactions and PhonePe had more than 40%, it said.
Gadgets360 noted that the cap does not apply to rival companies like homegrown payment facilitator Paytm, because it has a banking license and does not fall into the same “third party app provider category.”
On another front, India’s antitrust body, the Competition Commission of India, said earlier this week that it would look into an anonymous complaint that Google is unfairly using its market dominance to benefit its payments app.
According to Business Insider India, the body will investigate allegations about Google’s exclusive use of Google Pay in its Play Store and the practice of preinstalling and promoting Google Pay on Android phones.
At the same time, a new payment app backed by a global tech company has officially entered the Indian market. NPCI has cleared Facebook’s messaging platform WhatsApp to begin processing UPI payments through WhatsApp Pay. It will be allowed to begin processing with a maximum user base of 20 million, NPCI said.