The anticipation of Paytm losing UPI market share to the two fastest-growing players – Google Pay and PhonePe – has now come true. The Alibaba-backed digital payment firm has registered only 133 million transactions and contributed 16% to overall 822 million transactions across UPI-enabled platforms in July 2019.
Comparatively, PhonePe claims to have clocked 335 million transactions whereas Google Pay also has crossed 300 million UPI transaction volume mark in the same month.
This is a steep fall for Paytm from being the highest contributor among the aforementioned players in UPI ecosystem. The firm was reportedly clocking around 37% of overall UPI transactions in October 2018 and had maintained its dominance until March 2019. Even in May and June, Paytm was hovering around 200 million UPI transactions.
Google Pay and PhonePe have been able to reverse Paytm’s initial momentum and now the Vijay Shekhar Sharma led firm is far behind them in terms of volume as well as value.
Since Paytm has shifted its focus from cashback-led P2P transactions to UPI-based merchant payments, the fall in transaction volume was anticipated.
Last month, Sharma had revealed that the company will not drive promotions on UPI payments anymore as the user base has plateaued at 50 million.
Industry experts were also talking about stagnation in UPI, however, the NPCI-owned payments railroad has registered 9% increase in volume from 754.54 million in June to 822.29 million in July.
In overall transactions that include wallet, UPI, cards, and net banking, Paytm had processed over 600 million transactions in July. According to Deepak Abbot, Senior Vice President at Paytm, the company’s wallet is more preferred for offline payments than UPI, reports ET.
In fact, the wallet industry has faced a downfall in adoption due to regulatory pressure and the RBI mandate to convert all wallets into full KYC instruments before August 31.
Notably, Paytm claims to have around 70% market share in overall digital payments in online as well as offline merchant payments spaces. Given that merchant payments on UPI has grown 15% from April to 31% in June, it will be interesting to watch how shifting focus to UPI-based merchant payments brings a positive result for the company’s growth.