PhonePe, Google Pay’s market dominance will continue

Mumbai:Payment apps PhonePe and Google Pay have received a breather, with the National Payments Corporation of India (NPCI) giving them two more years to comply with guidelines on volume caps. Flipkart-owned PhonePe and Google Pay have 47% and 33% market share respectively.

In November 2020, the NPCI issued guidelines capping the share of transactions handled by a third-party application providers (TPAPs) at 30% each. Bankers said that the norms aimed to reduce any single-point failure risk. In March 2020, when Yes Bank was placed under moratorium, PhonePe had to work overnight to switch banks as its transactions were handled by UPI.

At the time of issuing the instructions, it was widely expected that new players like WhatsApp and Amazon Pay would scale up their payment operations.