By Jaspreet KalraMUMBAI (Reuters) – India has decided to postpone the enforcement of market share limits for a prominent digital payment method by two years, which will specifically benefit Google Pay and PhonePe, a payment system backed by Walmart. Initially proposed in November 2020, the regulation would have prohibited digital payment entities from controlling more than 30% of the transaction volume facilitated through India’s popular unified payments interface (UPI).
The original implementation deadline of the end of 2024 has now been extended to December 2026, as announced by the National Payments Corporation of India (NPCI), a quasi-regulatory body overseeing the country’s payment systems. Google Pay and PhonePe, which are among the most widely used applications in India for UPI transactions, will experience a favorable impact from this delay. Noteworthy competitors in this space include fintech firms like Paytm, Navi, Cred, and Amazon Pay.
As of November 2024, PhonePe held a substantial 47.8% share of UPI payments, while Google Pay’s share amounted to 37%, based on regulatory data. Combined, the two companies processed 13.1 billion transactions in November, as per available data.
A source familiar with the discussions, requesting anonymity due to media protocols, stated that the decision to extend the market share restriction timeline aims to foster continued growth within the UPI ecosystem and provide an opportunity for other players to expand their presence.
The NPCI has not yet responded to requests for comment regarding this development. Furthermore, it was revealed on Tuesday that the NPCI has removed the limit on user onboarding for WhatsApp Pay’s UPI service, according to a separate statement.
