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NPCI has enforced rules on UPI for Google Pay, PhonePe, Paytm and others. India’s digital payments ecosystem will prevent market dominance by any single third-party player.

The limit of 30% will be calculated on the basis of total volume of transactions processed on UPI during the preceding three months by a player, on a rolling basis, starting 1 January 2021.

Players have until December 2023 to comply with the market cap norms on UPI. Third party-apps and their partner banks will have to stop onboarding new users with immediate effect.

Further, the NPCI shall trigger the first alert through an email or a letter to a third-party payment provider and its partner banks, after their market share, in terms of total UPI transactions, hits the 25-27% threshold. Players will have to acknowledge this alert from NPCI.

A second alert will be sent by the retail payments organisation once a player hits 27-30% of total market share, with the entity having to provide evidence to NPCI of the actions undertaken to comply with market volume cap.

On crossing the 30% mark, third-party apps and their partner banks will have to stop onboarding new users with immediate effect.

However, NPCI stated that it may offer an exemption to players, based on justifications provided. During exemption, the third-party app will be asked to immediately moderate the on-boarding of customers. Exempted players will also have to submit a plan on how they look to correct the market cap breach.

The plan should reach NPCI in 5 working days from the date of communication regarding the breach, the retail payments organization said.

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