PhonePe and Google Pay accounted for an 85%+ share of India's 14.4B UPI transactions in July 2024; PhonePe led with 6.9B, Google Pay had 5.3B, and Paytm 1.1B
Digbijay Mishra / The Economic Times :
Context & Ripple Effects
This is a further concentration point in UPI: PhonePe and Google Pay had already held more than 80% of India’s mobile-payments market in earlier government data, and together processed more than 85% of July’s UPI volume.
The gap to the third-largest reported provider widened after RBI curbs coincided with a fall in Paytm’s UPI transactions earlier in 2024. That makes the leading pair’s scale relevant not only to consumer choice but to the distribution of activity on a national payments rail.
First-order effects
- PhonePe and Google Pay become the primary consumer-facing gateways for the large majority of July UPI payments, while Paytm operates at far lower reported volume.
- The July data reinforces PhonePe’s lead over Google Pay among the named providers, giving both leaders substantially more transaction activity than smaller rivals.
Second-order effects
- Smaller UPI apps face a harder acquisition and retention challenge: they must persuade users and merchants to maintain another payment app despite the two leaders’ established usage.
- Paytm’s reduced volume leaves more room for PhonePe and Google Pay to absorb user activity, while NPCI’s platform remains the common rail on which those apps compete.
Third-order effects
- If concentration persists, competition in UPI may increasingly turn on app-level distribution, merchant tools and adjacent financial services rather than access to the underlying payment network.
- The later decline in the two leaders’ combined share to 80% suggests this concentration is not necessarily fixed; sustained gains by smaller apps would make market-share dispersion an important countertrend.
The trend: India’s interoperable UPI rail is supporting enormous payment volumes while app-level competition remains concentrated, albeit with signs that smaller providers can gradually gain share.