Paytm shares drop 4% after NPCI extends deadline for UPI market share cap until 2026

Paytm shares fell by nearly 4 per cent to ₹976.5 on the BSE on Wednesday's trading session after the National Payments Corporation of India (NPCI) extended the deadline for UPI providers to comply with its 30 per cent market share cap by an additional two years, now set for December 31, 2026.

"Considering various factors, we, hereby, extend the timeline for compliance of existing third-party application providers (TPAPs) by another two years," NPCI said in its statement on December 31, 2024.

The company's market capitalization stands at ₹62,626 crore. The stock's 52-week low is ₹310, while its 52-week high is ₹1,063. On January 1, it was one of the biggest losers on the BSE Midcap index.

This delay will provide short-term relief to Walmart-owned PhonePe and Google Pay, which collectively dominate more than 85 per cent of the UPI payments market, giving them additional time to adapt to the new limit.

UPI volume cap

According to regulatory data, PhonePe accounted for 47.8% of UPI payments in November 2024, while Google Pay had a 37 per cent share. Together, the two companies processed 13.1 billion transactions during the month.

The mandate, which was originally set to begin at the end of 2024, will now come into effect at the end of December 2026, as stated by NPCI.

NPCI, established by the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA), serves as the umbrella organization overseeing retail payments and settlement systems in India.

The NPCI has also removed the limit on the number of users that can be onboarded to WhatsApp Pay's UPI product.

On Tuesday, the NPCI removed the restrictions on WhatsApp Pay's UPI product, further intensifying challenges for Paytm. In November, WhatsApp Pay handled 51.76 million transactions totaling ₹3,890 crore, securing the 11th spot among UPI service providers.

Despite this, WhatsApp's messaging platform has a user base of over 500 million in India, offering significant potential for future growth.