After gaining the status of the most preferred mode of payment in terms of volume in 2019, UPI maintained its momentum by processing 1.3 billion transactions in the first month of 2020.
The NPCI-owned digital payments platform has now surpassed all previous records and registered 1.32 billion transactions worth Rs 2.21 trillion (Rs 2,21,995 crore) in February — the highest ever figure for a month in terms of volume as well as value since its launch in 2016.
In October 2019, UPI had achieved the milestone of crossing 1 billion transactions in a month.
The average volume of transactions also surged to 45 million in February (29 days) as compared to 42 million in the previous month (31 days).
As of now, Google Pay, PhonePe and Paytm control over 90% of the UPI market share. On the other hand, government-promoted BHIM and other third-party apps such as Amazon Pay, FreeCharge, MobiKwik and WhatsApp Pay (for select users) collectively have a little over 5% of the market share in the UPI ecosystem.
After two years of struggle, WhatsApp Pay had recently received the NPCI nod to roll out payments service in a phased manner. With over 400 million user base in India, the Facebook-owned messaging app has the ability to change the UPI statistics in its favour when it receives a green signal for a mass launch.
Meanwhile, PayPal is also planning to launch a UPI payments service in India. One of the largest players of remittance services provider, PayPal will join the likes of global companies such as Google, Amazon, WhatsApp and Xiaomi, that have already launched their digital payment operations in the country.
While most of the private players mentioned above focus on peer-to-peer payments (P2P), Paytm, PhonePe and Google Pay compete with each other on the peer-to-merchant (P2M) front as well.
In terms of handling the hundreds of millions of transactions for third-party apps, private lender Yes Bank is leading the pack followed by Axis Bank, Paytm Payments Bank, SBI, HDFC and ICICI.
In January, Yes Bank handled 514 million transactions, controlling 39% of the total transactions registered on UPI in the month. The updated data for February is yet to come.
Over the last couple of months, UPI has become a hot topic as its umbrella organisation NPCI is all set to scrap PSP and interchange fee for P2M transactions. Waiving off these fees will affect the revenue model for merchant-based UPI payments service providers — Google Pay, PhonePe, Paytm, BharatPe and Amazon Pay.