Google Pay and PhonePe accounted for 80% of India's UPI transactions in Aug. 2025, down from 85% a year ago, as smaller players like Navi and BHIM gained ground
Pratik Bhakta / The Economic Times :
Context & Ripple Effects
A year earlier, PhonePe and Google Pay held more than 85% of UPI activity, making the current reading a measurable erosion of a previously entrenched duopoly. The earlier 85%+ combined share of UPI transactions provides the relevant baseline.
The shift is occurring on an expanding network: UPI had already passed 10 billion monthly merchant transactions in October 2024. That growth creates more transaction volume for challengers to capture without requiring the leaders to shrink in absolute terms.
First-order effects
- PhonePe and Google Pay lose combined transaction-share ground, while Navi and BHIM take a larger role in UPI usage.
- Navi and BHIM gain stronger evidence of user and merchant traction in a market previously dominated by the two largest apps.
Second-order effects
- The two leaders face greater pressure to defend transaction frequency and distribution as smaller apps become more credible alternatives.
- A broader set of active UPI apps gives merchants and users more viable payment entry points, reducing dependence on the leading pair.
Third-order effects
- If the share shift persists, UPI could evolve from a leader-heavy app market toward a more contestable payments layer, even as total transaction volumes grow.
- The durability of that change will depend on whether smaller players retain users and merchants rather than merely benefiting from a short-term redistribution of activity.
The trend: India's UPI ecosystem is gradually broadening beyond its two dominant consumer payment apps as continued network growth creates room for challengers.