Digital payments firm PhonePe has once again emerged as the top app on India’s Unified Payments Interface (UPI) in January, and increased its lead over Google Pay, while Paytm Payments Bank came a distant third.
According to the data released by the National Payments Corporation of India, a government body that runs the UPI, Walmart-owned PhonePe processed 968.72 million UPI transactions involving nearly 1.92 trillion rupees (US$ 26.38 billion) in January. This is over 100 million transactions more than that of Google Pay (853.53 million and worth 1.77 trillion rupees or $24.32 billion).
In December, PhonePe was top for the first time and processed 902.03 million transactions, while Google Pay processed 854.49 million. Paytm Payments Bank’s tally in January was 332.69 million transactions worth 378 billion rupees.
The three apps are dominating the UPI ecosystem and account for 93.5% of the January volume of 2.3 billion transactions, while in terms of value it was 94.5% at 4.31 trillion rupees ($59.21 billion). Transactions processed by Amazon Pay and WhatsApp stood at 46.30 million (40 billion rupees) and 0.56 million (3.6 million rupees) respectively.
Interestingly, WhatsApp’s January volume declined over 30% from its December tally (0.81 million transactions) amid fears over the messaging apps plan to share users’ data with its parent Facebook. But it still managed a UPI transaction value higher than December (2.97 million rupees).
WhatsApp put off its plan to implement the new norms to May 15, instead of February 8 following public concern and a spurt in downloads of its rivals Telegram and Signal on the Google Play Store.
The Unified Payments Interface platform witnessed a steady growth in 2020, barring a dip in April, when a countrywide lockdown to contain the spread of Covid-19 was in force. In December the number of transactions on the platform was 2.23 billion, while in May it was just around 1.23 billion.
The platform, which was developed by the National Payments Corporation of India in 2016, facilitates inter-bank transactions by instantly transferring funds between two bank accounts on a mobile platform. Currently, 207 banks support the platform.
Google Pay and PhonePe have opposed National Payments Corporation of India’s decision to cap the number of payments processed by them. In November last year, the corporation said that starting 2021, it will cap transaction volumes processed by an entity at 30% and gave Google Pay and PhonePe two years to comply.
The corporation claims this is being done to limit the damage to the payments ecosystem in case one of their systems collapses. But for Google Pay and PhonePe it will mean a drastic fall in transaction volumes, and for users it might also lead to a rise in failed transactions.