UPI Update: What PhonePe, GPay, and Paytm Users in India Should Know Before August 1

If you use UPI apps like PhonePe, Google Pay, or Paytm, there’s an important update coming your way. Starting August 1, 2025, some changes will take place that could affect how you send or receive money using these platforms.

Here’s what’s changing and what it means for you.

What’s Actually Happening?

The National Payments Corporation of India (NPCI) has announced that TPAPs (Third-Party App Providers) like GPay, PhonePe, and Paytm will need to follow a new rule: they must stick to a 30% market share cap when it comes to UPI transaction volumes.

In simple words — these apps can only handle up to 30% of the total UPI traffic in India.

This rule isn’t new; it was introduced back in 2020. But until now, there was no deadline. That’s changing on August 1, 2025, when enforcement officially begins.

Why This Change?

Right now, PhonePe and Google Pay together handle more than 80% of UPI transactions in India. That means just two apps are controlling most of the traffic.

The idea behind this new rule is to promote fair competition and encourage users to try other UPI apps, like BHIM or bank-owned apps. It’s also meant to avoid over-dependence on just one or two platforms.

What It Means for You (the User)

For most users, you won’t see a big difference right away. But here’s what might happen over time:

• New users trying to sign up on GPay or PhonePe might face limits if the app is already close to the 30% cap.
• You might be encouraged to try other UPI apps like Paytm, BHIM, or your bank’s UPI app.
• App speed or availability could be affected if the platform reaches its allowed limit — though companies will likely find ways to manage this smoothly.

Important: Your existing UPI accounts and payments will continue to work. There’s no need to panic or uninstall your favorite app.

A Push for More UPI Apps

This move might open doors for new or smaller UPI apps to grow — and for users to explore other options. It also means more innovation in how UPI works, especially in regional language support, payment reminders, and ease of use.

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At Webtree Software Solutions, we build secure, scalable, and user-friendly mobile apps — including payment and UPI-integrated solutions.

If you’re thinking of launching your own fintech product, or want to build a custom UPI app, our team is ready to help. We blend the latest tech with clear UX to bring your idea to life — smartly, affordably, and on time.

Let’s build something meaningful — together.