Bengaluru: The National Payments Corporation of India (NPCI) has allowed WhatsApp to increase its user limit for digital payments through UPI (Unified Payments Interface) to 100 million, which is a a two and a half times leap from the earlier limit of 40 million, said people knowledgeable about the matter.
Last year in November, the NPCI had allowed WhatsApp Pay to double its user base from the previously set limit of 20 million.
WhatsApp had been seeking permission for UPI payments for all its users in India all at once without any cap. However, the NPCI has granted it an increased limit of 100 million, informed the people in the know.
NPCI confirmed the new development in a late night statement on Wednesday.
How will the cap increase affect other UPI payment players?
The increase in WhatsApp Pay’s user base is likely to unsettle the current market leadership of leading UPI apps such as Phone Pe and Google Pay. The decision comes at a time when Tata Digital is about to make its debut on UPI and is expected to emerge as a significant player.
The new entries are likely to make a big dent in the UPI market share and change the dynamic of the industry. However, the industry executives have said that WhatsApp has the best chance to shake the market given its large user base of at least 400 million monthly active users for its messaging service.
With the increased limit, the highly debated issue of market share cap of UPI is going to be put to the test.
The NPCI has required that no one player process more than 30% of the total transaction volumes of UPI during a three-month period. However, existing players such as PhonePe and Google Pay were given time until the end of the year 2022 to act in accordance with the order.
Walmart and Flipkart-owned Phone Pe’s CEO Sameer Nigam had said in an interview in September last year that he was not worrying about the market share cap. He stated that he was already complying with all the rules and there was not a lot he could do to reduce his platform’s market share. “I would like to believe that this is now user preference starting to play out based on success rate (of transactions) and acceptance,” he had stated.
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