Paytm To Remain Unaffected by NPCI’s UPI Market Cap Transfer, Say Experts

New Delhi], November 23: The Nationwide Funds Council of India (NPCI) is in talks with the Reserve Financial institution of India (RBI) to determine the destiny of its proposed December 31, 2022 deadline for capping UPI market cap of every third-party app supplier to 30 per cent, based on a number of reviews. Whereas the implementation of the proposed transfer would considerably cut back the market cap of some online third-party fee apps, it could haven’t any affect on main fintech firm Paytm.

It is because Paytm UPI is owned by Paytm Funds Financial institution Restricted, which is NPCI-certified fee service supplier and issuer financial institution for UPI transactions, and never a third-party. Paytm Down: Customers Complain of Cost Points; Paytm Cash Comes Up With Assertion (Examine Tweets).

Paytm Funds Financial institution being an issuer and fee service supplier financial institution in itself together with being an acquirer of UPI transactions by itself platform, makes it the supply and vacation spot for all of its transactions. So, it successfully serves the shopper end-to-end in a transaction. Lately, Paytm Funds Financial institution stated that it helps market capping in UPI. Vijay Shekhar Sharma, CEO of Paytm, Arrested and Launched on Bail in February For Ramming Into DCP’s Automobile.

“We believe the proposed implementation of UPI market capping will be hugely beneficial for the UPI ecosystem. This move by the NPCI will bolster the growth of digital payments and democratize it for the citizens, ending market concentration risk. With this, UPI will become even more accessible and enable further digital adoption,” Paytm Funds Financial institution spokesperson stated in an announcement.

If the proposed UPI market cap comes into impact from December 31, 2022, it will likely be massively helpful for Paytm, which is presently the third based mostly on UPI market cap. Whereas UPI transactions bear no prices for the top consumer, it might assist Paytm ramp up its buyer acquisition, which is a vital facet of its enterprise mannequin and monetization.

“Early and adopters and late majority users of any app are the most important user base as they eventually help in monetisation. UPI third-party app providers are almost entering the fag ends of laggard users. Assuming the latest phase hitting in another year, changes suggested by NPCI may not be relevant. PayTM will sail through this change as their TPAP is exempted as it is being managed by Paytm Payments Bank,” stated Pooja Sondhi, Director and COO at provide chain finance options supplier Livfin.

Paytm Funds Financial institution continues to take care of its place as the highest UPI beneficiary financial institution within the nation, with 1,614.03 million transactions recorded in October 2022. It is usually among the many prime 10 main remitter banks within the nation, as per newest UPI statistics on NPCI’s website.

At current, the UPI market is dominated by gamers like Google Pay and PhonePe, with a mixed market share exceeding 80 per cent. To keep away from such focus within the UPI market, the NPCI in 2020 got here up with a directive to cap the share of transactions of at 30 per cent of the whole quantity of UPI transactions.

“Capping the market share of individual UPI players at 30 per cent might shake the duopoly of Google Pay and PhonePe and may lead the listed fintech company, Paytm, to gain market share from its peers owing to the volume cap norm,” stated Mohit Nigam, Head – PMS of Hem Securities.

“The UPI Ecosystem statistics show that other players such as BHIM, Cred, Amazon Pay have a very meagre market share and hence Paytm’s network effect might play out for it to capture some extra share of the pie from the top two players,” Nigam added.

NPCI had given current third-party app supplier that exceed the cap two years to adjust to the directive. Nevertheless, the massive amongst them have failed to scale back their particular person UPI market share and proceed to exceed the 30 per cent restrict by an enormous margin.

In keeping with a number of reviews, the NPCI is presently evaluating all the probabilities and no last determination has been taken to increase the deadline any additional.

(That is an unedited and auto-generated story from Syndicated Information feed, OKEEDA Workers could not have modified or edited the content material physique)