Market share cap move hindering IPO: PhonePe CEO

The proposed market share cap by the National Payments Corporation of India (NPCI) on UPI transaction volumes managed by third-party application providers (TPAPs) is hindering PhonePe's plans to go public, according to CEO Sameer Nigam. Speaking at the Global Fintech Fest, Nigam expressed concerns about the cap, which limits TPAPs to handling 30 percent of the UPI transaction volume.

He stated that the uncertainty surrounding this cap makes it difficult to confidently approach investors for an IPO. Nigam emphasized that he wants to ensure PhonePe can continue to grow before taking the company public, and not just rely on current numbers and market share.

The market cap directive, issued by NPCI in November 2020, aims to prevent the dominance of large players in the UPI space, who currently control over 80 percent of the market share among TPAPs. The deadline to comply with this cap has been extended several times, with the latest deadline set for December 2024.

As of July, the top three UPI players processed 93 percent of all transactions, with PhonePe leading with an 18.38 percent market share, and Google Pay following at 37 percent. Nigam also highlighted the importance of business continuity plans, noting that PhonePe has invested in building more data centers to ensure uninterrupted service. He acknowledged the responsibilities that come with scale and indicated that if the cap is lifted, there would be no further excuses to delay the IPO.

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