Google Pay, PhonePe, and other UPI apps may impose transaction limits; Paytm to remain unaffected

India’s National Payments Corporation of India (NPCI) and the Reserve Bank of India (RBI) are reportedly in the midst of deciding whether the unlimited transactions carried out via Google Pay, PhonePe and others should continue or not. The NPCI may soon implement its proposed volume cap for third-party app providers (TPAP), said a report by ANI. 

This comes after the NCPI sought the approval of a proposal reportedly sent earlier this month on wanting to impose a 30 per cent volume cap. Currently, there is no transaction cap on any of the UPI-based applications including Paytm, PhonePe, Google Pay, and so on. However, Google Pay and PhonePe are currently dominating the market with nearly 80 per cent of the shares. Therefore, the proposal was reportedly sent by NPCI to avert the risk of a monopoly. 

Paytm will not get affected by the transaction cap

The deadline for this proposed implementation is December 31, however, reports suggest that no decision has been made yet while some industry stakeholders want the NCPI to extend the last date. Paytm will not get affected by the transaction cap because it is owned by Paytm Payments Bank Limited, an NPCI-certified service provider and issuer bank transactions as opposed to being a third-party app provider, said a report by ANI. 

In a statement, the Paytm Payments Bank spokesperson said, the proposed implementation of capping the UPI market will be “hugely beneficial” for the UPI ecosystem and bolster the growth of digital payments and make it “more accessible”. Adding that this move will also democratize the platform for people and end the market concentration risk.