WhatsApp Doubles Transactions In December; PhonePe Takes UPI Market Lead

Despite launching in November 2020, Facebook-owned WhatsApp Payments (WhatsApp Pay) has managed to double its UPI transactions volume in December 2020, even as PhonePe and Google Pay maintained a commanding lead in the market. With a total of 2.2 Bn transactions worth INR 4.16 Lakh Cr processed in December, the UPI tally matched the November 2020 numbers.

WhatsApp Pay processed 0.81 Mn UPI transactions worth INR 29.72 Cr, which is double in terms of both volume and value compared to November, while PhonePe processed 902.03 Mn transactions and Google Pay was second with 854.49 Mn transactions, according to the latest data released by the National Payments Corporation of India (NPCI)

PhonePe overtook Google Pay after the latter had taken the lead in November as the most-used UPI app in India. 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.

In December, PhonePe processed transactions worth INR 1.82 Lakh Cr, to lead the market with a 40% share. Along with Google Pay, the Flipkart-owned payments platform processed close to 80% of the overall UPI transactions by volume. Among the established players, Paytm was the third-most used platform, processing 256.36 Mn payments.

Curiously, over 40% of UPI payments were classified as peer-to-merchant (P2M) transactions, and the rising share indicates that UPI use-cases changed slightly towards the end of the last year.

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.