PhonePe captures 50% UPI market share by value in August

PhonePe has captured over 50% of the market share in UPI transaction volume as of August, according to data from the National Payments Corporation of India (NPCI). The Walmart-controlled payments firm continues to maintain a strong lead over competitors like Google Pay and Paytm.

UPI registered 14.96 billion transactions worth Rs 20,60,735.57 crore in August. Out of this, PhonePe alone recorded 7.23 billion transactions amounting to Rs 10,33,264.34 crore, translating to a 48.36% market share by volume and a 50.14% market share by value.

In August, Google Pay recorded 5.59 billion transactions totaling Rs 7,42,223.07 crore, while Paytm processed transactions worth Rs 1,13,672.16 crore. Google Pay held a market share of 37.3% by volume and 36% by value, whereas Paytm captured a market share of 7.21% by volume and 5.51% by value.

In July, PhonePe, Google Pay, and Paytm held market shares of 48.3%, 37%, and 7.82% by transaction volume, respectively.

While PhonePe and Google Pay saw increases in their transaction numbers, Paytm's growth slowed down during the last month. Emerging players such as CRED, Navi, and Fampay are capturing market share from the leading firms. For example, CRED processed 147 million transactions, while Navi and Fampay handled 88 million and 57 million transactions, respectively.

UPI is nearing 500 million transactions per day, and NPCI Chief Dilip Asbe already predicted that the platform will reach 1 billion transactions daily by 2026-27.

Meanwhile, NPCI has raised the upper limit for UPI transactions to Rs 5 lakh for specific types of payments, including tax payments, payments to hospitals and educational institutions, as well as investments in IPOs and RBI retail direct schemes.

The high market concentration with the top three players does not augur well for any significant change in the market when it comes to any significant monetization, one would imagine. Especially when two of the top three happen to be foreign owned. That is not what the smaller players, and many other fintechs looking for a more viable use case in the UPI payments ecosystem want. Not to mention the credit card segment which continues to cede ground to UPI.

For the fiscal year ending in March 2024 (FY24), NPCI’s revenue from operations spiked to Rs 2,876 crore from Rs 2,065 crore in FY23 while its profit surged to Rs 1,134 crore from Rs 828 crore during the same period.