The National Payments Corporation of India (NPCI) is thinking about changing the rules for payment companies like Google Pay, PhonePe, and Paytm. Currently, NPCI restricts what percentage of the market each company can control, but it’s struggling to enforce these rules.
The NPCI initially wanted to limit each company’s market share to 30%, to promote competition. However, PhonePe, which is owned by Walmart, already controls around 48% of the market, followed by Google Pay with 37.3%. Paytm, once a major player, now has only 7.2% of the market.
Some UPI providers are worried that NPCI will increase the market share limits, allowing PhonePe and Google Pay to become even more dominant. This could make it harder for other companies to compete.
The NPCI has already delayed enforcing the market share limits several times, including pushing back the deadline from January 2021 to January 2025. PhonePe, which is the most valuable fintech startup in India, is concerned about the uncertainty around the regulations.
PhonePe’s CEO, Sameer Nigam, recently said that the company can’t go public until the regulatory issues are sorted out. He argued that it’s difficult for investors to price the company’s shares if there’s uncertainty about its market share.
The NPCI has not commented on the matter, but industry executives expect that increasing the market share limits could be a controversial decision. The stakes are high, particularly for PhonePe, which is under pressure to adapt to the changing regulatory landscape.
