Google Pay, PhonePe account for 82% of UPI market by volume in Nov

Walmart-backed PhonePe and Google-backed Google Pay have the lion’s share of the unified payments interface (UPI) market. 

According to the data released by the National Payments Corporation of India (NPCI), Google Pay and PhonePe together have more than 82 per cent of the market by volume and more than 86 per cent by value. 

In November, Google Pay had done 960.02 million transactions, accounting for Rs 1.61 trillion, followed by PhonePe, with 868.4 million transactions, worth Rs 1.75 trillion.

New entrant into the market WhatsApp Pay had done 300,000 transactions in November, worth Rs 13.87 crore. 

Paytm’s UPI transactions in November had breached 260 million, worth Rs 28,986.93 crore.  

Other large players, such as Amazon Pay, had reported 37.15 million transactions, worth Rs 3,524.51 crore, while NPCI’s own Bhim app had processed 23.56 million transactions, worth Rs 7,472.20 crore.

Google Pay, PhonePe, Paytm, and Amazon Pay account for 96.17 per cent of the UPI market by volume and 94 per cent by value.

According to the October data released, Google Pay accounted for 857.81 million transactions, while PhonePe came in second, with 839.88 million transactions. Together, the two payments providers accounted for more than 82 per cent of the market by volume. The data said Rs 1.66 trillion worth of transactions had happened through Google Pay in October, while Rs 1.68 trillion worth of transactions had taken place through PhonePe. This made up for 86 per cent of total transaction value on UPI in October.

The NPCI had recently imposed 30-per cent cap on third-party applications (apps) on total volume transactions processed via UPI, effective January 1, 2021. This had prompted many to criticise the regulator for stifling competition in the UPI space. 

Google Pay had said it would have implications for millions of users using UPI for their daily payments. It could impact the further adoption of UPI and the end goal of financial inclusion, it had said.

“Digital payments in India is still in its infancy and any interventions at this point should be made with a view to accelerate consumer choice and innovation. Choice-based and open model key to drive momentum," Google Pay had said.

However, the existing third-party app providers processing over 30 per cent transactions will have a period of two years from January 2021, to comply with the same in a phased manner.

Both Google Pay and PhonePe will have to comply with the NPCI’s diktat and bring down the share in UPI transactions to below 30 per cent in the next two years. 

Experts believe this move is aimed at derisking the concentration risk from one or two players that currently dominate the UPI market share and ensure new players are given equal opportunity. 

Experts believed with WhatsApp entering the market, these third-party apps would face increased competition, given it already has a huge user base. So, what the NPCI is trying to do is to ensure WhatsApp does not sink its teeth into a sizeable chunk of the UPI market.

Meanwhile, UPI had recorded over 2 billion transactions for the second time on the trot in November, indicating the general population has taken to digital payments as a way of life. 

The transactions, which had crossed the 2-billion mark in October, and amounted to Rs 3.86 trillion in all, rose to 2.21 billion in numbers and Rs 3.91 trillion in value in November. 

Launched in 2016, UPI crossed 1 billion transactions for the first time in October 2019. While it took UPI three years to reach 1 billion transactions in a month, the next 1 billion came in under a year.