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India delays UPI payments market share cap in relief for Walmart-backed PhonePe, Google Pay

India has postponed the implementation of market share caps for UPI payments to December 2026, benefiting major players like Google Pay and PhonePe, which currently dominate the market.

Entities like PhonePe, Google Pay, and the like are Third Party App Providers (TPAPs) who participate in the UPI ecosystem as service providers to banks who are part of the UPI network. (Representative/ File)

India on Tuesday delayed the implementation of market share caps for a popular digital payments method by two years, a move that will benefit Google Pay and Walmart-backed PhonePe.

According to the proposal, first made in November 2020, digital payment firms would not be allowed to hold more than 30% share of the volume of transactions processed via India’s popular unified payments interface (UPI).

The mandate, which was to take effect from the end of 2024, will now kick in at the end of December 2026, according to a statement from the National Payments Corporation of India (NPCI), a quasi-regulator.

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Google Pay and Walmart-backed PhonePe are the two most widely used apps in India to make UPI payments. Other players include fintech companies such as Paytm, Navi, Cred and Amazon Pay.

PhonePe’s share of UPI payments stood at 47.8% in November 2024 while Google Pay’s share was at 37%, according to regulatory data. The two firms processed a combined 13.1 billion transactions in November, the data showed.

“The decision to delay the market share cap is aimed at not hindering the growth of the UPI ecosystem while also giving other players the time to grow,” a person familiar with the discussions said, speaking on the condition of anonymity as they are not allowed to speak to the media.

The NPCI did not immediately respond to an email seeking comment.

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The NPCI also lifted a cap on WhatsApp Pay’s UPI product onboarding users, according to a separate statement on Tuesday.

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