The National Payments Corporation of India (NPCI) announced on December 31, 2024 that it has “removed the UPI user onboarding limit for WhatsApp Pay”. In practical terms, this means WhatsApp Pay can now extend UPI services to its entire Indian user base of over 500 million. In other words, the previous 100-million-user cap is gone, and India’s most-used messaging app can now onboard all its users onto UPI. This marks a shift from NPCI’s earlier cautious, phased rollout approach.
Previously, WhatsApp Pay was deliberately limited. NPCI had required a graded rollout: only about 40 million users were allowed in 2020, rising to 100 million by 2022. These caps were imposed to scale growth gradually and to prevent any one platform from dominating the system. At the time, UPI was already massive — processing over 13 billion transactions per month — and two apps (Google Pay and PhonePe) controlled roughly 85% of that volume. By limiting WhatsApp Pay’s early rollout, regulators hoped to avoid market imbalance. Now that those caps are lifted, WhatsApp Pay can expand at full scale.
Delayed UPI Market-Share Cap
Alongside lifting the user limit, NPCI also delayed the planned 30% market-share cap for UPI apps. This cap (first announced in late 2020) was meant to prevent any single third-party app provider from handling more than 30% of total UPI volume. It was widely seen as targeting the two dominant players — PhonePe and Google Pay — which today together process about 85% of UPI transactions. However, on Dec 31, 2024 NPCI announced that the compliance deadline for this cap has been extended by two years, now moving to Dec 31, 2026.
In practice, this means PhonePe and Google Pay get extra time to stay above 30% share without penalty. PhonePe alone currently holds close to half of UPI volume. But for WhatsApp Pay, the deferral is also welcome: it means WhatsApp can grow its transaction share without immediately worrying about the 30% limit. NPCI’s statement noted that the extension was granted “considering various factors”, implying that both industry readiness and inclusion goals played a role. For now, the rule will not take effect until the end of 2026.
What This Means for Small Businesses
These regulatory changes could have a big impact on Indian MSMEs. Small merchants already rely heavily on WhatsApp: one recent survey found that 97% of Indian MSMEs use WhatsApp or WhatsApp Business in their operations. Likewise, UPI is already a top payment method for them (about 43% of MSMEs prefer UPI for transactions). By allowing UPI payments for all WhatsApp users, NPCI is effectively bringing a hugely popular payment rail into the chat app where small businesses already communicate with customers.
- Broader in-chat payments: With the cap lifted, every WhatsApp user can send or request money via UPI in a chat. This means any customer on WhatsApp can pay a business directly in the chat window, without switching apps or scanning QR codes. MSMEs using WhatsApp (for example through WhatsApp Business) can now receive payments from the full user base, not just a limited subset. In short, payments become as easy as sending a message.
- More reach, fewer restrictions: Earlier, only a fraction of WhatsApp’s users could actually make UPI payments (due to the 100M limit). Now that limit is gone, small shops and kiranas can reach the entire WhatsApp ecosystem. Every one of the 500+ million Indian WhatsApp users is a potential customer able to pay instantly. It also means small businesses aren’t tied to just one payment provider’s captive user base — they gain more flexibility as WhatsApp competes with Google Pay, PhonePe, and others.
- Potential new fintech tools: With unrestricted scale, WhatsApp (Meta) is likely to deepen its fintech offerings. We may see advanced payment features in WhatsApp Business, such as integrated billing, digital storefronts, or lending services tied to payment history. Meta’s CEO has even noted that UPI creates “a world of opportunities for micro and small businesses” by making payments easier. Now that WhatsApp Pay can operate across all users, it has the user base to justify rolling out these full-scale financial tools. In the future, merchants could get built-in invoicing, analytics, or credit options right in WhatsApp.
NPCI’s move ultimately aligns with India’s goal of digital inclusion. By bringing UPI to WhatsApp’s massive audience, the regulator hopes to spur more commerce through digital payments. For MSMEs, the removal of the cap and the UPI market-share delay together mean that the channel they already trust (WhatsApp) can now reliably process business payments at scale. Small businesses should watch for new updates: easier in-chat UPI payments mean faster checkouts, larger customer reach, and possibly new financial services delivered right through their WhatsApp chats.
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References
- India lifts WhatsApp payment curbs. TechCrunch, Dec 31, 2024. Techcrunch
- WhatsApp Pay gets approval for 100 million users in India. TechCrunch, Apr 13, 2022. Techcrunch
- India again delays rules to break PhonePe-Google Pay duopoly. TechCrunch, Dec 31, 2024. TechCrunch
- India delays UPI payments market share cap in relief for Walmart-backed PhonePe, Google Pay. Reuters, Dec 31, 2024. Reuters
- NPCI lifts limit for WhatsApp Pay, extends UPI cap by 2 years. Entrackr, Dec 31, 2024. Entrackr
- WhatsApp and WhatsApp Business Dominate MSME Landscape With a 97% Usage Rate: Report. Entrepreneur India, Jun 26, 2024. Entrepreneur
