Google Pay, PhonePe Dominate UPI Landscape With Over 80% Transaction Share

Google Pay has regained the top spot in the digital payments app race with the highest share of UPI transactions for November, after losing its position to Walmart-owned PhonePe back in October.

In November, Google Pay registered about 960 Mn transactions worth INR 1.61 Lakh Cr as per data released by the NPCI. It was followed by PhonePe with 868.4 Mn transactions worth INR 1.75 Lakh Cr. Notably, PhonePe had a larger share in terms of transactional value. Both the company cumulatively held about 82% of the market share. In October, the duo had 86% market share.

Paytm was a distant third with 260.09 Mn UPI transactions worth INR 28.986 Cr, followed by Amazon Pay with 37.15 Mn transactions worth INR 3,524.51 Cr. Meanwhile, Samsung Pay recorded 1.59 Mn transactions worth INR 324.52 Cr, and Mobikwik recorded 1.53 Mn transactions amounting to INR 201.44 Cr. Recently launched WhatsApp Payments has a minor share with only 310K transactions worth INR 13.87 Cr.

Overall, the National Payments Corporation of India (NPCI) recorded 2.21 Bn UPI transactions in November, representing a 6.7% growth from 2.07 Bn transactions registered in October. UPI transaction value grew to INR 3,90,999 Cr from INR 3,86,106 Cr recorded in the previous month.

NPCI had launched UPI back in 2016 and it became a popular choice among consumers for money transfers and merchant payments. While it started off with a meager 9 Mn transactions in July 2016, it crossed the billion mark in October 2019. It took only a year for UPI to douple this and cross the 2 Bn mark.

Recently, NPCI introduced a 30% cap on the total volume of transactions processed in UPI. This means that third-party applications like Google Pay, PhonePe, WhatsApp Payments and others can only process 30% of the total volume of transactions processed in UPI. However, this cap will only apply for existing players from January 2023, who will have two years to regularise their transaction share to fall under the cap.

NPCI has said, the cap of 30% will be calculated on the total volume of transactions processed in UPI during the preceding three months (on a rolling basis). The decision will come into effect from January 1, 2021 for new players such as WhatsApp Payments.

The 30% cap was introduced to help address the risks emanating from an overload of the UPI payments infrastructure from one app. However, several experts and stakeholders also saw the move as NPCI’s attempt at ensuring that India’s digital payments market allows the entry of new players and isn’t monopolised by the few big players who are currently dominating the market.