Currently there is no limit to the number of exchanges. According to the report, around 80% of the market share is shared by two platforms namely Google Pay and Phone Pay. Currently NPCI is planning to implement a 30% volume cap for third party application providers. The objective behind this is to avoid monopolization of market share in the market.
A meeting has already been held to thoroughly examine all aspects of the matter. Officials of NPCI, senior officials of the Ministry of Finance, representatives of the Reserve Bank etc. were all present in this meeting. As of now, no decision has been taken regarding the December 31 deadline. All options are being analyzed by NPCI. By the end of this month, NPCI is expected to take a decision on UPI market cap implementation.
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In 2020, NPCI had issued a directive capping on direct exchanges of exchanges. Volume transactions handled through UPI by a third party application provider is pegged at 30%. It came into effect from January 1, 2021. This cap was fixed on the basis of transactions carried out in the previous three months.
Record increase in UPI transactions
Meanwhile, a record growth was recorded in UPI transactions in the country. Last October, 12.11 lakh crore transactions were done through UPI. Last May it crossed the milestone of 10 lakh crore. In terms of volume, it was a record 730 crore UPI transactions in October. 678 crore in UPI transactions in the previous month.
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