PhonePe Leads UPI Market With 42% Share, Google Pay Trails by 6%

February 2021 did not turn out to be a great month for the Unified Payments Interface (UPI), which noticed its first dip since April 2020. National Payments Corporation of India (NPCI) recorded 2.29 Bn UPI transactions last month compared to 2.30 transactions in January 2020. The transaction value also dropped from INR 4.31 Lakh Cr to INR 4.25 Lakh Cr in the same period.

Despite this marginal fall, Walmart-owned PhonePe facilitated 42.5% of the UPI transactions volume and about 45% of the transactional value in February 2021. The digital payments unicorn led the market with 975.53 Mn transactions valuing INR 1.89 Lakh Cr.

It was closely followed by Google Pay with a 36% market share, thanks to 827.86 Mn transactions volume. The Google-owned company facilitated transactions worth INR 1.74 Lakh Cr, taking up 41% of the total value transacted using UPI in February 2021.

Collectively, PhonePe and Google Pay made up about 79% of the total transactional volumes with 1.8 Bn transactions and 85% of the total value worth INR 3.63 Lakh Cr in February 2021. 

Paytm was a distant third with a 12.6% share in transactional volume, with 290 Mn UPI transactions last month. The Vijay Shekhar Sharma-led company reported INR 34.4K Cr transaction value, translating to a 0.8% share. Amazon Pay, on the other hand, facilitated only 44.2 Mn transactions worth INR 3.8 Cr. The company has market share of 1.9% in terms of volume.

The youngest player in the UPI market, Facebook-backed WhatsApp Payments accounted for only 0.02% share in the UPI market by facilitating 0.55 Mn transactions in February. WhatsApp payments was launched in the month of November 2020.  The transaction value through WhatsApp payments stood at INR 32.41 Cr.

Notably, NPCI-owned BHIM reported 20.44 Mn transactions worth INR 6.3K last month leading to a market share of 0.87% in terms of volume.

UPI is currently leading the already-growing digital payments segment in India. According to the Reserve Bank of India (RBI) data, the digital payments ecosystem has increased at a compound annual growth rate (CAGR) of 55.1% over the past five years between 2016-2020. During this period, transactional value has grown from INR 920.38 Lakh Cr to INR 1,623.05 Lakh Cr, representing an annual compounded rate (CAGR) of 15.2%.

To further boost the digital payments ecosystem in the country, finance minister Nirmala Sitharaman, during her Union Budget speech for 2021, allocated INR 1,500 Cr to the sector.