NPCI CAPS THE UPI TRANSACTION LIMIT
                     NPCI CAPS THE UPI TRANSACTION 
LIMIT
INTRODUCTION
• The National Payments Corporation of India (NPCI) is thinking 
how to limit the Unified Payment Interface’s (UPI) dependence 
on any single third-party application.
Source: Indian Express
KEY POINTS
• NPCI is expected to give payments apps three months to 
comply with the rules
• UPI recorded 1.34 Bn transactions worth INR 2,61,835 Cr in 
June 2020
Source: ET Tech
DIGITAL PAYMENTS
• For digital payments players like Google Pay, PhonePe, Paytm 
and others the transaction limit may come down.
• UPI ecosystem is dominated by Google Pay, Paytm, PhonePe 
and Amazon Pay, who together control 90% market share.
Source: The Financial Express
INDIVIDUAL SHARE OF PAYMENT APPS
• Google Pay is the top UPI payment app in India, with 42% 
market share, followed by PhonePe with 35% share, and 
Paytm with around 15-20% share.
Source: Zee business
UPI TRANSACTIONS WILL BE CAPPED FOR ALL APPS
• NPCI has created ruffle across the digital payments industry 
by announcing that the total number of transactions for each 
app will be capped.
• In case the cap is violated, NPCI can penalize the apps.
Source: The Economic Times
HOW WILL THIS CAP WORK?
• As per the rules formulated by NPCI:
– In the first year of operations, no app can have more 
than 50% share of UPI transactions
– In the second year, 40% cap
– In the 3rd year, and onwards, 33% cap
Source: Business Standards
HOW WILL THIS IMPACT?
• Once one payment app, hits 50% share of all UPI 
transactions, their users won’t be able to make UPI 
payments.
• Apart from that  on boarding of new users will  also stop.
• This will force the end-user to opt for other UPI payment 
apps.
Source: Indian Express
WHY LIMIT TRANSACTIONS?
• The NPCI has decided to put a cap on UPI transactions to limit 
the damage to the payment ecosystem in India.
• Though the transaction limit will hamper the growth of the 
players operating in the segment, there will no major impact 
on the Indian payments ecosystem.
Source: Live Mint
RISK MANAGEMENT
• UPI will do risk management review across products, and the 
impact of market capping will be discussed with each firm.
• Execution details will also be discussed with firms in detail
Source: The Economic Times
UPI’S SUCCESS SO FAR
• UPI payments have turned out to be the most popular digital 
payments method in India. 
• It recorded 1.34 Bn transactions worth INR 2,61,835 Cr in 
June 2020. 
Source: The Economic Times