Daily News Analysis

NPCI Extends Market Cap Deadline for UPI Apps

stylish_lining

NPCI Extends Market Cap Deadline for UPI Apps

Why in News?

The National Payments Corporation of India (NPCI) has extended the deadline for Third-Party App Providers (TPAPs) to comply with the 30% transaction cap on Unified Payments Interface (UPI) transaction volumes until 31st December 2026.

Key Points:

  • Impact on Major UPI Players: This extension impacts major TPAPs like PhonePe and Google Pay, which together handle more than 80% of UPI transactions.

  • Transaction Cap: The 30% transaction cap was introduced in November 2020 to mitigate concentration risks and ensure a balanced ecosystem in UPI transactions.

Compliance Requirement:

  • Exceeding the Cap: TPAPs exceeding the 30% cap must halt onboarding new customers to comply with the rule.

  • Based on Average Transaction Volume: The cap is determined based on the average UPI transaction volume over the past three months. TPAPs that have already exceeded this cap are given a grace period to comply, with phased reductions until the deadline in 2026.

Background:

  • Initial Cap Introduction: The cap was first introduced in November 2020 to reduce risks of over-reliance on a few players in the UPI ecosystem.

  • Deadline Extension: The deadline was extended in December 2022, with the current deadline being set for 31st December 2026.

NPCI:

  • Establishment: NPCI was established by the Reserve Bank of India (RBI) and the Indian Banks' Association (IBA) under the Payment and Settlement Systems Act, 2007.

Third-Party App Providers (TPAPs):

  • Role of TPAPs: TPAPs are non-bank entities that offer UPI-based financial services via mobile apps or platforms, acting as intermediaries between users and banks (referred to as sponsor banks). They are not part of banks or financial institutions.

Conclusion:

The NPCI's decision to extend the deadline for TPAPs to comply with the 30% transaction cap is aimed at ensuring a more equitable distribution of UPI transaction volumes, preventing the dominance of a few platforms. This move is significant for major players like PhonePe and Google Pay, as it impacts their expansion plans and user acquisition strategies.


 

Women in Armed Forces

The first-ever batch of 17 female cadets graduated from the National Defence Academy (NDA), marking a historic step toward greater gender inclusion in India's armed forces. Significance of
Share It

Cultural Appropriation

Cultural appropriation refers to the adoption of elements from one culture by members of another, often in ways that exploit, disrespect, or commodify the original culture. This becomes particular
Share It

Cultural Capital and Its Significance in India

Cultural capital refers to the non-economic assets such as education, knowledge, and cultural practices that contribute to social mobility. It was coined by French sociologist Pierre Bourdieu to e
Share It

QS World University Rankings 2026

India’s higher education system has shown significant improvement in the QS World University Rankings 2026, with a notable increase in the number of Indian universities ranked globally Ab
Share It

India's Semiconductor Market

India’s semiconductor industry is witnessing rapid growth and is expected to continue its upward trajectory, driven by several key trends and emerging opportunities. Market Size and Growth
Share It

Cess

A cess is an additional tax imposed by the Government of India for a specific purpose, as authorized under Article 270 of the Indian Constitution. It is levied on top of existing taxes or duties l
Share It

GIAHS Programme and India’s Agricultural Heritage

India, home to diverse agricultural systems, has recently gained recognition for hosting three Globally Important Agricultural Heritage Systems (GIAHS). This milestone was highlighted by the Minis
Share It

Made in India Label Scheme

The Made in India Label Scheme has recently been supported by a proposed allocation of INR 995 crores over the next three years, a move that highlights the Indian government’s commitment to
Share It

RBI’s 7 Sutras for AI Adoption

The Reserve Bank of India (RBI) has recently introduced the Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI), outlining 7 guiding sutras for the ethical use of
Share It

Left-Wing Extremism (LWE)

India’s fight against Left-Wing Extremism (LWE) has seen notable progress, marked by a dramatic reduction in insurgent incidents and a significant contraction of the Red Corridor. The insurg
Share It

Newsletter Subscription


ACQ IAS
ACQ IAS