The National Payments Corporation of India (NPCI) recently announced significant regulatory changes aimed at reducing the dominance of existing players and increasing competition in the Unified Payments Interface (UPI) ecosystem.
These changes, including lifting restrictions on WhatsApp Pay and postponing the introduction of market share caps for UPI apps, further demonstrate NPCI’s commitment to creating a fairer digital payments environment in India and ensuring equal opportunities for all participants. Indian TV news highlights reported.
Remove restrictions on WhatsApp Pay
One of the most important announcements is the removal of the 100 million user cap on WhatsApp Pay, allowing Meta to expand its service across India’s 500 million+ user base, and helping India’s rapidly growing digital This means that we can strengthen our presence in the payments market.
WhatsApp Pay is a payments feature on the popular messaging platform that allows users to send and receive money directly within the WhatsApp app.
It facilitates secure peer-to-peer money transfers and payments for goods and services by integrating with digital payment systems such as India’s UPI or linking to credit and debit cards in other countries.
In India, WhatsApp Pay was first introduced in 2020 with a cap of 40 million users. By November 2022, the user limit has been raised to 100 million.
These restrictions were aimed at ensuring the platform could manage the demands of India’s large digital payments ecosystem, while maintaining Financial Express’ security and performance standards. reported. It also worked to prevent market monopoly in India’s UPI ecosystem.
The new enhancements will give WhatsApp ample time to solidify its position in India’s competitive fintech landscape. WhatsApp Pay’s large user base and seamless integration with popular messaging platforms positions the platform as a solid challenger to established players.
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Future challenges
While this regulatory change opens up new opportunities, WhatsApp Pay faces significant hurdles in gaining market share in India’s payments landscape.
According to WhatsApp Pay currently has fewer than 7-8 million active UPI users out of 100 million registered users, according to Deepak Abbott, fintech founder and former executive at payments startup Paytm. . This means that removing user caps alone may not be enough to significantly increase market share.
Further, Abbott points out that out of 360-375 million UPI users, only 100 million are responsible for the majority (65%) of the payments. This suggests that users are likely already choosing their preferred payment app, and this behavior is here to stay, making gaining market share a prominent challenge.
Deferment of market share cap
Along with removing user caps for WhatsApp Pay, NPCI has postponed proposed rules that would limit a single app’s share of UPI transactions to 30%. Originally scheduled to take effect in 2024, the deadline has now been extended to December 31, 2026, providing temporary relief to powerful companies.
Walmart-backed PhonePe and Google Pay currently lead the UPI market in India, controlling over 85% of transactions. PhonePe’s share is estimated at 47.8%, while Google’s is estimated at 37%.
UPI is a real-time payment system developed by NPCI to facilitate seamless, instant and secure transfer of money between bank accounts. The system allows users to link multiple bank accounts into one app, allowing person-to-person and person-to-person transactions without sharing sensitive information. It is available 24/7 and supports features such as QR code payments, bill payments, and utility services with minimal or no fees.
Introduced in 2016, UPI has become the backbone of digital payments in India. handling Over 15 billion transactions every month. The government is currently taking steps to extend the reach of UPI across borders and enable Indian consumers and businesses to make and receive payments internationally.
Currently, U.P.I. teeth We live in seven countries including major markets such as UAE, Singapore, Bhutan, Nepal, Sri Lanka, France and Mauritius.
Featured image credit: Edited from freepic
