This post first appeared on TelecomTalk Read more at: https://telecomtalk.info/upi-transactions-in-india-changes-soon/286584/, UPI Transactions in India to Undergo Major Changes Soon, What You Should Know
Unified Payments Interface (UPI) has made it very easy for people to transact money with each other. Be it for personal transactions or business transactions, it can be done instantly and without any extra cost. UPI is regulated and governed by the National Payments Corporation of India (NCPI). The regulatory body has made an announcement for a change that will soon come to the UPI apps. The announcement has come as a shock for all the major apps such as Google Pay, PhonePe, and Paytm. Keep reading ahead to understand how it might affect you.
Capped Transactions for UPI Apps
Every UPI app will have a certain capped limit for the transactions which can happen through them. In case any of the apps violate the limit set by the regulator, they will be penalised. The most affected apps due to these rules will be Google Pay, PhonePe, and Paytm. These are the leading UPI apps in the country. So how will the cap limit work for these apps?
There are three major rules that you need to understand. The first rule is, none of the UPI apps should have more than a share of 50% UPI transactions done through them if it is their first year of operations. In case it is the app’s second year, they cannot process more than 40% of the UPI transactions. For the third year, the apps cannot have a share of more than 33% UPI transactions.
The details for execution will be discussed with each of the companies in detail so that there is no confusion regarding the rules to anyone. So how does this affect the end-user aka you?
In the current scenario, Google Pay is on top of all the other UPI apps in India by having 42% of the market share. Second to Google Pay is PhonePe with 35% of the market share followed by Paytm which has a relatively smaller market share between 15%-20%.
So once Google Pay reaches the 50% threshold, it won’t be able to accept more transactions or customers. New users might not be able to sign up with the app or make transactions. When that limit is reduced the next year, even some of the old users might have to opt for some other platform for online transactions with UPI. More details about how it will affect the end-user will clear up with time.
Original article: UPI Transactions in India to Undergo Major Changes Soon, What You Should Know
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