NPCI data: UPI transactions processed by Paytm fell 14% to $19.9B from January 2024 after RBI curbs, while PhonePe rose nearly 7% and Google Pay rose almost 6%
- Paytm loses usage even before any disruption to its systems — Services of Walmart, Google capitalize on Paytm's troubles
Context & Ripple Effects
The RBI action had already shaken confidence in Paytm, reflected in its two-day market-cap loss after the clampdown. This transaction data shows that customer behavior was shifting before any reported systems interruption.
The immediate beneficiaries went on to hold an 85%+ combined share of UPI transactions later in 2024. By 2025, that share had eased as smaller apps gained ground, indicating that concentration was substantial but not fixed.
First-order effects
- Paytm faces an immediate loss of UPI payment activity following the RBI curbs, weakening its position with active consumers and merchants even while its systems remain available.
- PhonePe and Google Pay capture the near-term displaced transaction flow, with their reported monthly volumes rising as Paytm's falls.
Second-order effects
- The shift reinforces a two-sided payments advantage for PhonePe and Google Pay: more consumer activity makes those apps more compelling for merchants, which can in turn support further usage.
- It also sharpens the policy tension around UPI concentration. The earlier 30% cap proposal for individual UPI apps was aimed at the same risk now highlighted by volume moving toward the largest platforms.
Third-order effects
- If regulatory actions against individual payment providers repeatedly redirect activity to the largest rivals, UPI resilience may increasingly depend on whether users and merchants can switch easily among apps rather than on any one app's continuity.
- Later evidence of smaller UPI players gaining share suggests the market could diversify over time, but the scale of PhonePe and Google Pay means that outcome is not assured.
The trend: India's UPI market is balancing rapid scale and leader consolidation against regulatory efforts and competitive openings that can broaden app-level participation.