Capping UPI transaction share a tough ask for NPCI

To avert concentration risk, a UPI app's market share must be capped at 30% by Dec 2026

- Shayan Ghosh & Anshika Kayastha

The deadline to implement the UPI volume cap has been postponed twice, the latest being from January to December 2026.

(ISTOCKPHOTO)

A plan by the National Payments Corp. of India (NPCI) to restrict an app to a little over a third of the overall transactions on fast payments platform UPI by the end of 2026 is a tough ask, regulators and financial sector experts said.

The idea first came to the fore in 2020, when the retail payments umbrella body, NPCI, announced it would impose a 30% cap on Unified Payments Interface (UPI) volumes. The plan was to counter concentration risk, given that the top two apps-PhonePe and Google Pay-already accounted for nearly eight of 10 transactions.

The deadline to implement the cap has been deferred twice since, the latest being from January to December 2026. NPCI data showed that 82% of UPI transactions were processed through PhonePe and Google Pay in October, compared to 86% in the year ago period. Industry insiders say the 400 basis point (bps) gain in market share by other UPI apps shows they are catching up, but at an very slow pace.