NPCI Lifts Onboarding Restrictions for WhatsApp UPI, Boosting User Base Potential

UPI Market Share Cap Delayed

India’s digital payments regulator, the National Payments Corporation of India (NPCI), has lifted the onboarding restrictions for WhatsApp Pay. This decision enables WhatsApp Pay to extend its UPI services to all users in India without any phased limitations.

Previously, NPCI allowed WhatsApp Pay to expand its UPI user base gradually. Even with the restriction removed, WhatsApp Pay remains obligated to comply with existing UPI guidelines and third-party app provider (TPAP) regulations.

Mohan K., Founder of TechFini, remarked, “The removal of the UPI onboarding limit not only increases accessibility but also strengthens WhatsApp’s position as a key player in India’s digital payments ecosystem.

With WhatsApp’s extensive user base, this change can drive widespread adoption of UPI for everyday transactions such as money transfers, bill payments, and online purchases directly within the app.”

Key Points to Remember While Using WhatsApp Pay

• Ensure you have the latest version of WhatsApp installed on your Android or iOS device.

• A valid Indian bank account and an active debit card are required.

• Other UPI users can see the name on your bank account, as mandated by NPCI for fraud prevention.

• WhatsApp identifies your account using the phone number linked to your bank.

• Payment descriptions are not encrypted end-to-end, though personal messages remain encrypted.

• Payments sent will appear as “Pending” until processed.

• Descriptions for payments made via UPI ID, number, or QR code are not encrypted end-to-end.

• Payments made directly in chat ensure the payment messages are encrypted.

• Payment messages will not appear on your bank statement.

• WhatsApp does not store your UPI PIN or full bank account details, ensuring enhanced security.

This development further cements WhatsApp Pay’s role in revolutionizing digital payments in India, making UPI transactions more seamless and accessible for millions.

NPCI Postpones UPI Market Share Cap, Providing Relief to PhonePe and Google Pay

UPI Market Share Cap Delayed India has delayed the enforcement of market share caps for Unified Payments Interface (UPI) transactions by two years, giving significant relief to major players like Google Pay and Walmart-backed PhonePe. Originally set to take effect at the end of 2024, the mandate will now be implemented by December 2026, according to a statement from the National Payments Corporation of India (NPCI).

Introduced in November 2020, the proposal sought to limit any single digital payment app to a maximum of 30% market share of UPI transaction volumes. This delay aims to support the continued growth of the UPI ecosystem while allowing smaller competitors time to scale their operations, as per a source familiar with the discussions.

In November 2024, PhonePe commanded a 47.8% share of UPI transactions, while Google Pay held 37%, jointly processing 13.1 billion transactions. Other players in the UPI market include Paytm, Navi, Cred, and Amazon Pay.

The NPCI also announced the removal of the onboarding cap for WhatsApp Pay, enabling the platform to extend UPI services to its entire user base without restrictions.

This decision underscores efforts to balance the rapid expansion of UPI with opportunities for broader competition in India’s digital payments landscape.

UPI market share cap deadline extended to 2026

NPCI Extends UPI Market Share Cap Deadline to December 2026

UPI Market Share Cap Delayed The National Payments Corporation of India (NPCI) has extended the deadline for Unified Payments Interface (UPI) providers to comply with a 30% market share cap to December 31, 2026. Initially proposed in 2020, this cap aimed to limit any single provider’s dominance in the UPI ecosystem.

The deadline extension provides temporary relief to major players like Walmart-backed PhonePe and Google Pay, which together hold over 85% of the market.

In November 2024, PhonePe processed 7.4 billion transactions, nearly 50% of UPI’s total volume, while Google Pay accounted for 5.7 billion. Smaller competitors like Paytm, Navi, and Cred are gradually gaining traction, with market shares of approximately 1% each.

The NPCI’s decision follows industry concerns that implementing the cap now could hinder UPI’s rapid adoption and growth, which is projected to expand significantly in the coming years. Vishwas Patel, Chairman of the Payments Council of India, stated that market forces are likely to resolve dominance issues naturally without restricting leading providers’ growth.

WhatsApp Pay Gains Approval for Expansion

UPI Market Share Cap Delayed In a separate move, the NPCI has lifted restrictions on WhatsApp Pay, allowing the Meta-owned messaging platform to offer UPI services to its entire Indian user base of over 500 million.

Despite WhatsApp’s extensive reach, its share in UPI payments remains minimal.

This expansion aligns with NPCI’s broader goal of diversifying the UPI ecosystem. Efforts to encourage smaller UPI players, such as Navi and Cred, to grow through incentives have seen limited success thus far.

The extended timeline for the market share cap and WhatsApp Pay’s growth potential reflect the NPCI’s strategy to foster innovation and inclusivity while maintaining UPI’s momentum as a cornerstone of India’s digital payments revolution.