Google Pay hits out at NPCI’s UPI transaction cap

BENGALURU: Digital payment firm Google Pay has come out strongly against the National Payments Corporation of India’s (NPCIs) move capping the amount of UPI transactions a third-party application (TPA) can handle at 30 per cent. NPCI had said on Thursday that all TPAs will have to comply with the 30 per cent volume cap with effect from January 1, 2021.

TPAs with a share  above the specified limit such as Google Pay and Phone Pe have been given two years starting January, 2021 to comply with the guidelines in a phased manner. Industry experts say that the decision may ultimately impact UPI transactions at the consumer level and there are apprehensions that TPAs will limit the volume and value of transactions per customer. 

The number of UPI transactions breached the two billion per month mark in October and TPAs like Phone Pe and Google Pay accounted for 80 per cent of overall  transactions. Phone Pe said that it processed 835 million transactions in October, slightly higher than Google Pay.

Both the TPAs currently have a share of more than 40 per cent of overall UPI transactions. With Facebook-backed Whatsapp going live with its payment service for 20 million users from Friday, NPCI’s UPI transactions cap seems to be an attempt to prevent the dominance of any single player in crucial market, according to experts. 

“This announcement has come as a surprise and has implications for hundreds of millions of users who use UPI for their daily payments and could impact the further adoption of UPI and the end goal of financial inclusion. Digital payments in India is still in its infancy and any interventions at this point should be made with a view to accelerate consumer choice and innovation. Choice-based and open model key to drive momentum,” Google Pay said on Friday. PhonePe when contacted offered no comments over the issue.

Whatsapp payment service available in 10 languages

Facebook Chief Executive Officer Mark Zuckerberg said in a video message on Friday that Whatsapp’s payment service will be available in India in 10 different languages , which will be supported by more than 140 banks.

“We’ve been working on this with the NPCI, who oversee everything to make sure it’s secure and reliable. And we’ve built it using India’s Unified Payments Interface, which makes it easy for anyone to instantly accept payments across different apps—and for companies to provide people with great services,” he said.