CRED, WhatsApp Pay Emerge Biggest Gainers As UPI Records A Slow November

CRED and WhatsApp Pay emerged as the biggest gainers in terms of UPI transaction volume and value, respectively, for the second consecutive month in November.

As the UPI transaction value saw a rare 1.73% month-on-month (MoM) decline in November 2022, several UPI third-party application providers (TPAPs) also recorded a decline in transaction value. 

The National Payments Corporation of India (NPCI) recorded 730 Cr transactions worth INR 11.91 Lakh Cr in November 2022, Inc42 reported earlier this month. It was the first MoM decline since June 2022, when the transaction value fell by 2.60%.

However, the transaction volume increased by a negligible 0.06% in November.

PhonePe, Google Pay, Paytm and CRED recorded declines in transaction value during November 2022. However, these apps continued to dominate the UPI market, both in terms of transaction volume and value.

In terms of transaction value, PhonePe continued its market dominance, with the Walmart-owned app commanding nearly half of the total share of the value of UPI transactions.

PhonePe, Google Pay and Paytm recorded a fall in transaction value over the last month, with transactions reducing by 0.4%, 2.7% and 3.6%, respectively. 

For the past few months, CRED and WhatsApp Pay have been among the top gainers, given their rapid growth based on incentivising users by offering cashback. 

While the transaction value on CRED fell by 8.2% to INR 18,599.72 Cr in November 2022 from INR 20,259.70 Cr in October 2022, WhatsApp Pay recorded an increase of 8.6% to INR 769.29 Cr in November 2022 from INR 708.56 Cr in October 2022, making it the biggest gainer in terms of transaction value in November.

However, the trend in terms of transaction volumes was quite different.

PhonePe continued its dominance in November, with the Flipkart subsidiary processing nearly half of all the transactions during the month. Google Pay and Paytm were in the second and third positions, respectively, in terms of the number of UPI transactions during the month. The top three apps accounted for 95% of all UPI transactions in November.

While Google Pay recorded a growth of 1.8% MoM, Paytm and PhonePe recorded a decline of 2.5% and 1%, respectively, in terms of transaction volume.

The biggest winner in terms of transaction volume was CRED, as the number of transactions grew to 2.56 Cr in November from 2.13 Cr in October 2022, a growth of 20.4%. WhatsApp Pay was in the second position, with UPI transaction volume on the app increasing 10.4% to 92.5 Lakh in November from 83.8 Lakh in October.

Tata Neu, September’s biggest gainer, recorded a flat November in terms of transaction volume and a 6.2% decline in transaction value. 

The NPCI has also been disclosing the high, medium and other transacting categories, along with the ratio of P2P and P2M transactions for the last few months.

In November 2022, groceries, restaurants, mobile recharges and games, among others, was in the high transacting category. These industries are characterised by a low average transaction ticket size and high repeatability. The high transacting categories have been consistent for the past three months.

The medium transacting categories included utilities such as electricity and gas, alcohol and debt collection, among others. On the other hand, other transacting categories included DTH payments, securities, tolls and bridge fees, among others.

Last week, the NPCI extended the deadline for UPI apps to comply with the UPI market share cap of 30% by two years till December 31, 2024, citing the digital payment method’s current usage and future potential, among other factors. 

While this is a good development for market leaders PhonePe and Google Pay, the likes of Paytm and others had been looking forward to the enforcement of the market cap to capture a larger market share.