PhonePe Secures 50% UPI Market Share in August – A Dominant Force

PhonePe has managed to secure more than half of the market share for UPI transactions as of August, according to data from the National Payments Corporation of India (NPCI). The company, which is controlled by Walmart, remains ahead of its competitors such as Google Pay and Paytm. In August, UPI saw a total of 14.96 billion transactions valued at Rs 20,60,735.57 crore. Among these, PhonePe alone accounted for 7.23 billion transactions, totaling Rs 10,33,264.34 crore. This translates to a market share of 48.36% by volume and 50.14% by value.

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During the month of August, Google Pay managed to process 5.59 billion transactions, reaching a total value of Rs 7,42,223.07 crore. On the other hand, Paytm handled transactions amounting to Rs 1,13,672.16 crore. Google Pay held a market share of 37.3% by volume and 36% by value, while Paytm achieved a market share of 7.21% by volume and 5.51% by value.

In July, PhonePe, Google Pay, and Paytm had market shares of 48.3%, 37%, and 7.82% in terms of transaction volume. While PhonePe and Google Pay experienced increases in their transaction numbers, Paytm’s growth slowed down in the last month.

New players like CRED, Navi, and Fampay are gaining market share from the established companies. For instance, CRED processed 147 million transactions, while Navi and Fampay handled 88 million and 57 million transactions, respectively.

The number of UPI transactions is close to reaching 500 million per day, and NPCI Chief Dilip Asbe has forecasted that the platform will achieve 1 billion transactions per day by 2026-27. At the same time, NPCI has raised the maximum limit for UPI transactions to Rs 5 lakh for certain types of payments, such as tax payments, payments to hospitals and educational institutions, as well as investments in IPOs and RBI retail direct schemes.

The dominance of the top three players in the market doesn’t bode well for any major changes in the market, especially in terms of significant monetization. This is particularly concerning as two of the top three players are foreign-owned. Smaller players and many other fintech companies striving for a more practical use in the UPI payments ecosystem are not satisfied with this situation. Additionally, the credit card segment continues to lose ground to UPI.

In the fiscal year ending in March 2024 (FY24), NPCI’s revenue from operations increased to Rs 2,876 crore from Rs 2,065 crore in FY23, while its profit surged to Rs 1,134 crore from Rs 828 crore during the same period.

In August, PhonePe secured over 48% of UPI market share by volume and 50% by value, surpassing competitors Google Pay and Paytm. While PhonePe and Google Pay experienced transaction growth, Paytm’s growth slowed. New players like CRED, Navi, and Fampay are gaining market share. The UPI platform is nearing 500 million transactions per day, with a projected 1 billion transactions per day by 2026-27. NPCI’s increased UPI transaction limit to Rs 5 lakh for specific payments, but the dominance of foreign-owned top players raises concerns among smaller fintech companies. Additionally, UPI is outpacing the credit card segment.