India won’t enforce a cap on the market share for players operating on the homegrown payments network until December 31, 2024 in a surprising move that analysts say is a major a win for Google Pay and Walmart’s PhonePe.
The National Payments Corporation of India, the payments body that oversees the Unified Payments Interface payments network, said on Friday that it is taking the move in part to ensure existing players have enough time to comply with the rules.
“In view of significant potential of digital payments and the need for multi-fold penetration from its current state, it is imperative that other existing and new players (Banks and Non-Banks) shall scale-up their consumer outreach for the growth of UPI and achieve overall market equilibrium,” it wrote.
NPCI initially planned to enforce the market cap rules in January 2021, but has delayed the timeline several times since. It originally saw the need to enforce a market cap check to address the “risks” and “protecting the UPI ecosystem as it further scales up.”
UPI is a payments infrastructure built by large banks in India and is backed by the Indian government. It has become the most popular digital payments method in the country in recent years.
PhonePe and Google Pay command over 80% of the UPI market share. The new move is seen as a loss for rivals such as Paytm, which were hoping that the NPCI, which is a special unit of the country’s central bank, will introduce the rail-guards much sooner.
(More to follow)