Business Desk, ETV Bharat: After a long wait, Facebook-owned WhatsApp on Friday launched its 'Pay' services in India. Many are expecting WhatsApp Pay will be a monopoly in the United Payments Interface (UPI) segment, given the fact that the app already has over 400 million users in the country.
However, a separate announcement made by the National Payments Corporation of India (NPCI) on Thursday makes any such dominance impossible.
Just a month after UPI transactions breached the 2 million mark in the country, NPCI has announced that no single third-party app provider (TPAP) can process more than 30% of the total UPI transactions from 1 January 2021.
The move aims to restrict the monopoly of any single player in the UPI space at a time when it is growing at a brisk pace. “This will help to address the risks and protect the UPI ecosystem as it further scales up,” NPCI said in a release dated 5 November.
The cap of 30% will be calculated basis the total volume of transactions processed in UPI during the preceding three months (on a rolling basis), it added.
However, NPCI didn’t elaborate on what happens if an app exceeds the limit or the cap, resulting in concerns over UPI transactions being rejected on popular payment apps like Google Pay and PhonePe.
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According to media reports, Google Pay and PhonePe are the two leading players in the UPI segment with market share of around 40% each. Apart from that, Paytm and MobiKwik together account for nearly 20% of the total UPI transactions. Therefore, a 30% cap on a single player might result in churning of some market share in the UPI space.
However, Google Pay and PhonePe might benefit slightly from the fact that NPCI has given existing TPAPs that exceed the specified cap an additional time period of two years from January 2021 to comply with the same in a phased manner. Meanwhile, WhatsApp Pay will have to adhere to the guidelines from January 2021 itself.
Despite this, analysts are certain that WhatsApp Pay will eventually gain a respectable market share as and when it gets permission to add more users in India. Currently, only 20 million users in India will be able to use the payment service of the app.
A Bloomberg report said that even with the presence of players like Paytm, Google Pay, PhonePe, Amazon Pay and dozens of other start-ups, WhatsApp’s enormous user base will give it a unique advantage in a market slated to grow to $1 trillion by 2023.
