On Thursday, the National Payments Corporation of India (NPCI) announced a cap of 30 percent of the total volume of transactions processed in UPI by a Third Party App Provider (TPAP).
"With UPI reaching 200 crore transactions a month and with potential for future growth, it has issued a cap of 30 percent of total volume of transactions processed in UPI, applicable on all Third-Party App Providers (TPAPs). This will be with effect from January 1, 2021," NPCI's official statement read.
The organisation said that the cap will help address the risks and protect the UPI ecosystem as it further scales up.
"The existing TPAPs exceeding the specified cap will have a period of two years from January 2021 to comply with the same in a phased manner," it said.
The decision is likely to impact payment apps like Google Pay, PhonePe, and Paytm that are widely used in India. Recently, PhonePe claimed 40 percent market share in UPI transactions.
Further, there has been a substantial increase in the volume of UPI transactions after the COVID-19 pandemic. NPCI reported 80 percent growth in volume from 1.14 billion transactions in October 2019 to 2.07 billion transactions last month. The transaction value has also jumped 101 percent from Rs 1,91,359.94 crore to Rs 3,86,106.74 crore during the said period.
Meanwhile, NPCI also allowed WhatsApp to launch UPI services in a phased manner.