NPCI dismisses reports of charges on UPI transactions
The National Payments Corporation of India (NPCI) has denied reports about Unified Payments Interface (UPI) transactions being charged from January 1, 2021, and requested all citizens not to fall prey to such incorrect information.
A statement from NPCI on Friday, January 1, read, “NPCI has urged all the customers to not believe in such stories and continue to perform uninterrupted and convenient UPI transactions.”
Several media reports had incorrectly stated that the NPCI was planning to levy an additional charge on UPI payment services, especially for those belonging to third-party app providers, from January 1 this year.
In November last year, NPCI had announced a change in policy concerning third-party app providers where it had placed a cap of 30 percent on their total transaction volume on UPI.
NPCI said the cap of 30 percent will be calculated basis the total volume of transactions processed in UPI during the preceding three months (on a rolling basis).
This will potentially impact all the TPAPs like Google Pay and PhonePe, even as NPCI said this decision will help to address the risks and protect the UPI ecosystem as it further scales up.
However, in a relief to the existing TPAPs, NPCI said those exceeding the specified cap will have a period of two years from January 2021, to comply with the same in a phased manner.
In the present scenario, Google Pay and PhonePe dominate the UPI transactions market, and any such cap is likely to hurt both these companies.
UPI has recorded rapid growth ever since the nation went into a lockdown in March 2020 to combat the COVID-19 pandemic. Previously recording around a billion transactions on average every month, the number of transactions on the platform has now shot up to two billion.
The new guidelines issued by NPCI, however, are likely to be very tricky in terms of implementation. According to industry observers, it remains to be seen how this cap is going to implemented and what kind of impact it will have on the end-user.
Edited by Kanishk Singh