PhonePe, Google Pay adopt different modes to deal with NPCI UPI limit

PhonePe, Google Pay adopt different modes to deal with NPCI UPI limit

Mumbai: New rules capping the permissible market share of Unified Payments Interface (UPI) apps at 30% have evoked different responses from incumbent leaders, Walmart-backed PhonePe and Google’s GPay. Google Pay is learnt to be reassessing its customer engagement initiatives such as cashbacks to bring its share below 30%, PhonePe said it will not stop aggressive marketing for at least a year and continue to scale up its user base.

As of March, PhonePe had a market share of 44% on UPI whereas GPay’s share was 35%, well above the limit set by the National Payments Corporation of India (NPCI), as per the latest available data. The new rules, which kicked in from the first quarter of 2021, allows both these players time till 2023 to “moderate” their onboardings to the permissible 30%.

“We are advertising on the Indian Premier League (IPL) this year, and so are other digital payment players. We are not slowing down our marketing plans for the year,” Sameer Nigam, CEO of PhonePe, told ET. “We have mentioned in the past that our vision is to get the next 500 million users to the digital payments fold, and we will continue to work on reaching that number.”

The limits were first introduced by NPCI in November 2020 through a circular with a more detailed enforcement guideline in March. The 30% cap is aimed at ensuring “parity” among the over 50 UPI apps in operation while also preventing monopolies. In the first quarter of 2021, PhonePe emerged as the market leader processing UPI payments, with its monthly volume growing nearly 40% from 854 million transactions in December to 1.199 billion transactions in March.

The Walmart-backed fintech also increased its market share from 38.2% to 44.2%, NPCI data showed.

“The guidelines do not kick in for us until Jan ’23 and there is no immediate impact…” Nigam said.



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