Walmart’s payment arm in India PhonePe continued to remain the dominant UPI app for a third straight month in February 2021, cornering an impressive 42.5 per cent share of the 2,292.90 million UPI transactions during the said month. PhonePe, which was spun off from Flipkart in December last year and currently competes with Google Pay and Paytm primarily, processed 975.53 million UPI transactions amounting to Rs 1.89 lakh crore, up from 968.72 million UPI transactions worth nearly Rs 1.92 lakh crore in January 2021, according to the data released by the National Payments Corporation of India (NPCI). Likewise, Google Pay, which lost the top spot to PhonePe in December 2020, remained the second-largest UPI app in February processing 827.86 million transactions (36 per cent of total UPI volume) worth Rs 1.74 lakh crore, down from 853.53 million transactions worth Rs 1.77 lakh crore in January. PhonePe and Google Pay had a combined 78.5 per cent UPI volume share in February.
“It is a common trend to have one or two players lead digital payments in a market where trust is more valuable than the product itself. Countries with a low trust system, wherein people believe in the product only after using it, are likely to have players with returning customers unlike markets, which are more liberal in terms of risk-taking, for instance, the US where people try different products at different times based on their pros and cons. Certainly, in the long term there are duopolies in all markets,” Pavel Naiya, Senior Analyst, Counterpoint Technology Market Research told Financial Express Online.
Paytm was still the distant third player in February recording 340.71 million transactions involving Rs 38,493.52 crore. It had processed 332.69 million transactions worth Rs 37,845.76 crore in the preceding month. Other prominent non-bank UPI apps including Amazon Pay, WhatsApp, Jio Payments Bank, and MobiKwik processed 44.22 million, 0.55 million, 0.36 million, and 1.92 million transactions respectively in February.
Importantly, UPI transaction volume and value had contracted for the first time in February since April last year. 2302.73 million transactions involving Rs 4,31,181.89 crore were processed in January 2021. UPI transactions in April last year had declined to 999.57 million amounting to Rs 1,51,140.66 crore from 1,246.84 million transactions worth Rs 2,06,462.31 crore in the preceding month. Nonetheless, the year-on-year volume growth was 73 per cent in February while the value had nearly doubled by 91 per cent. February 2020 volume stood at 1,325.69 million transactions worth Rs 2,22,516.95 crore.