UPI Apps in India to impose transaction limit on payments

UPI is at the forefront of payment choices as the use of digital payments continues to grow along with digitalization. A limit on the transaction is likely to be implemented shortly, according to a media report on UPI payment platforms like Google Pay, PhonePe, and Paytm, among others. There is currently no volume cap on UPI transactions, and PhonePe, Google Pay, and Paytm control 94.6% of the UPI market as a whole.

After then, customers might not be able to utilise UPI payment apps to make an unlimited number of payments. According to the media report, the Reserve Bank is in talks with the National Payments Corporation of India (NPCI), which manages the UPI digital pipeline, about enforcing its suggested December 31 deadline for capping participant volume at 30%.

In November 2022, the NPCI suggested a volume cap for third-party app providers (TPAP) of 30% to prevent concentration risk. There are many unified payments interface (UPI)-using payment services in India, including GPay, PhonePe, Paytm, and BHIM, all of which are in direct competition with one another. The overall value of transactions made via UPI in October increased by more than 12.11 lakh crore, or 7.7 per cent, to 730 crores. There was 678 billion UPI-driven digital transactions worth Rs. 11.16 lakh crore in



September.

PhonePe, Google Pay, and Paytm collectively control 94.6% of the UPI market. According to data from the National Payments Corporation of India, PhonePe held the largest percentage of all UPI transactions in India at 49% in October (UPI). PhonePe was followed by Google Pay, Paytm, CRED Pay, and others (WhatsApp, Amazon Pay, and banking apps) with a combined market share of 34%, 11%, 1.8%, and 3.5%, respectively.

In October, there were 48.25 crore instant interbank financial transfers made using IMPS (Immediate Payment Service), with a value of Rs 4.66 lakh crore. According to the National Payments Corporation of India's most recent monthly data, there were 4.3% more transactions than in September (NPCI).

With 265.5 crore UPI transactions in October, Yes Bank led all payment service providers (PSPs), followed by Axis Bank with 119.5 crore, ICICI Bank (107.5 crore), Paytm Payments Bank (101.9 crore), and State Bank of India (73.5 crore).

According to SBI's analysis, India's once-cash-led economy has evolved into one dominated by mobile payments. A lower level of currency in circulation is comparable to a reduction in the CRR for the banking system since it causes less deposit leakage and has a favourable effect on monetary transmission.