National Payments Corporation of India (NPCI) is all set to introduce new guidelines for digital payment companies in order to minimise concentration and systemic risks in UPI; PhonePe and Google Pay’s UPI successes may be in a conundrum.

NPCI decision to put a cap on the UPI market share of digital payment companies directly impacts UPI-only players such as Walmart’s Phonepe, Google Pay and upcoming Whatsapp Pay. Interestingly, Paytm is the only major player which is still backing its wallet success and cards besides UPI.

Morgan Stanley had recently referred Phonepe emerging as a major factor for a handsome uptick in Walmart share-prices. However, this new capping may affect the company’s valuation jump and fundraising plans as it seeks $1 billion from Tiger Global, Tencent, DST Global, Softbank, and others.

A senior banker said on anonymity, “This exhibits NPCI’s raising concerns over the increasing security threats by non-banking payment companies. Phonepe will have to revisit its business strategy for a possible fundraiser at this stage.”

Till now PhonePe and Google Pay have been burning a lot of cash to gain the highest market share and this move comes as a major setback and will limit their market share to 33 per cent. Other industry veterans and experts have applauded NPCI’s move and are of the opinion that this will secure the digital payments infrastructure in India.

(With input from agencies)