The regulation would have affected players like PhonePe and Google Pay, which share a big chunk of the UPI market. NPCI had earlier said it will implement the rule by January 1, 2023.
This was a contentious mandate by the NPCI requiring payment apps to hold no more than 30% market share on the UPI network.
“Taking into account the present usage and future potential of UPI, and other relevant factors, the timelines for compliance of existing TPAPs (third-party apps) who are exceeding the volume cap, is extended by two (2) years i.e. till December 31, 2024 to comply with the volume cap.,” NPCI said in a circular.
“In view of significant potential of digital payments and the need for multi-fold penetration from its current state, it is imperative that other existing and new players (Banks and Non-Banks) shall scale-up their consumer outreach for the growth of UPI and achieve overall market equilibrium.”
ET first reported in its June 6 edition saying third-party UPI apps were likely to get more time for compliance.
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ET has been covering the much-debated issue of UPI market share where Google Pay and PhonePe dominate more than 80% of the market share while Paytm, Amazon Pay and WhatsApp Pay are other players on the network.
As per the latest NPCI data for the month of September, PhonePe and Google Pay had market shares of 46.7% and 33.3%, respectively, in terms of volumes of UPI transactions handled.
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