New Delhi, India – The National Payments Corporation of India (NPCI), the governing body overseeing India’s popular UPI payments system, is considering easing its proposed market share cap for operators like Google Pay, PhonePe, and Paytm, according to sources familiar with the matter.
The move comes as NPCI has faced challenges in enforcing the initial 30% market share limit, which was aimed at promoting competition among UPI providers. Given the rapid growth of UPI transactions and the dominance of certain players, NPCI is exploring the possibility of increasing the allowable market share.
While PhonePe currently holds a significant market share of around 48%, Google Pay is not far behind with a 37.3% share. Paytm, once a major player, has seen its market share decline to 7.2%.
The potential relaxation of the market share cap has sparked debate among industry executives, with some expressing concerns about the dominance of certain players and the potential impact on competition. Others argue that the rapid growth of UPI and the increasing number of users necessitate a more flexible approach.
NPCI has so far declined to comment publicly on the market share issue, and it remains unclear when a final decision will be made. The stakes are high, particularly for PhonePe, which is India’s most valuable fintech startup with a $12 billion valuation. The company’s co-founder and CEO, Sameer Nigam, has expressed concerns about the regulatory uncertainty and its potential impact on the company’s ability to go public.
