The National Payments Corporation of India (NPCI) has officially announced an extension for the implementation of a 30% market share cap on individual Unified Payments Interface (UPI) apps, now set to take effect by December 31, 2026. This delay comes as a significant relief for dominant players such as PhonePe and Google Pay, which currently command approximately 85% of the UPI transaction market.
Originally proposed in 2020, the cap was introduced with the objective of fostering fair competition and avoiding the rise of monopolistic control within India’s rapidly growing digital payments sector. By placing this restriction on any single UPI app, NPCI aims to create a more diversified and competitive environment that will benefit both consumers and merchants alike.
As part of the ongoing efforts to strengthen the UPI ecosystem, the Reserve Bank of India (RBI) is also introducing new updates starting January 1, 2025. These updates include increased transaction limits, which are expected to improve the convenience and flexibility of UPI services for users.
The delay in enforcing the market share cap also provides an important window for the development and growth of homegrown fintech companies. This move aligns with broader government objectives to encourage local innovation and provide more alternatives to consumers, in turn supporting India’s goal to become a global leader in digital financial services.
