Digital payments platform PhonePe has created a new record by clocking close to 1.5 billion transactions through unified payments interface or UPI in July followed by Google Pay which registered more than 1 billion transactions for the first time since its entry into the digital payments ecosystem in India in 2017.
PhonePe recorded 1492.09 million transactions in the last month whereas Google Pay registered 1119.16 million transactions, data released by the National Payments Corporation of India shows. During the period, PhonePe and Google Pay had 45.94% and 34.45% market share in the UPI ecosystem respectively. In June, PhonePe controlled 46% share in the UPI with 1292.71 million transactions while Google Pay had 34.6% with 972.26 million transactions.
To recall, UPI had recorded 3.34 billion or 334 crore transactions worth Rs 6.06 trillion or Rs 6,06,281 crore in July.
In the top five UPI apps used by consumers in July, Paytm, Amazon Pay and Yes Bank Apps (Yes Pay and Yes Mobile) have maintained their third, fourth and fifth position respectively. Where Paytm recorded 387.85 million transactions and grabbed 11.94% market share, Amazon Pay and Yes Bank Apps had a collective market share of less than 3%.
Government-promoted BHIM still has not been able to make it to the top five list. However, it was much ahead of Yes Bank Apps in terms of amount processing through its platform.
WhatsApp, which was allowed to onboard more users on its app, did not show any improvement and remained one of the least used UPI apps in July. In November 2020, the Facebook-owned messaging app received a nod from NPCI to onboard up to 20 million users for its UPI-enabled payments feature. According to Entrackr’s sources, the company later received another relaxation to onboard as many users as it could.
The rise in the adoption of UPI apps has increased in the past couple of years. According to experts tracking the digital payments space, PhonePe has been able to dominate the UPI ecosystem as it aggressively focuses on merchant payments and performed well as compared to its competitors. While Google Pay primarily targets peer to peer payments, Paytm has been positioning itself as a full-stack payments suite that includes point-of-sale (PoS) and payments gateway.
PhonePe handles its UPI transactions with three payment service provider banks namely Yes Bank, ICICI and Axis whereas Google Pay does it through Axis, HDFC, ICICI and SBI.
With recurring mandates and UPI as a payment option while subscribing for IPO is also going to push the digital payments ecosystem to the next level.
In March, NPCI announced a standard operating system to implement the market cap on third party UPI apps including PhonePe and Google Pay. The organisation also said that it may penalise these third-party apps in case they violate the rule adding that it will also provide an exemption to these players to comply with the new rules under certain conditions.
It’s worth noting that the new rules do not apply to Reliance’s Jio Payments Bank and Paytm as they hold payments banking licenses and they do not fall into the “third-party apps” category.