India’s digital payments market is anchored by two large platforms that now sit at different stages of their corporate lifecycle. One97 Communications, which operates Paytm, reported profit, while PhonePe, backed by Walmart, is preparing for a public listing, having filed its Updated Draft Red Herring Prospectus in January 2026.
Both companies operate consumer payments, merchant payments, and financial services distribution on top of the Unified Payments Interface infrastructure.
As of September 2025, PhonePe processed the largest share of customer-initiated UPI transaction value in the country, while Paytm reported positive EBITDA and reported profit for the quarter ended September 30, 2025.
The divergence between transaction scale and earnings outcomes has become more visible as the two companies disclose their numbers under different reporting regimes.
Paytm Vs PhonePe: The big differentiator
A comparison of Paytm and PhonePe across network scale, payments throughput, financial performance, merchant device economics, lending structures, default loss guarantees draws out some interesting facts. From wealth platforms and monetisation models, drawing exclusively from company disclosures, to earnings materials and PhonePe’s Draft Red Herring Prospectus, here are key factors to watch.
Paytm vs Phonepe: Financial performance over H1 FY26
For H1 FY26, PhonePe reported revenue from operations of Rs 3,918.47 crore and total income of Rs 4,174.51 crore. The company reported a restated net loss of Rs 1,444.42 crore for the six-month period and Adjusted EBITDA of Rs 253.91 crore. Net worth stood at Rs 9,539.02 crore as of 30 September 2025, as disclosed in its DRHP.
Paytm disclosed consolidated revenue, EBITDA, and profit after tax for H1 FY26 in its unaudited half-year financial results approved on 4 November 2025. While Paytm’s earnings presentation places greater emphasis on quarterly trends, its statutory results confirm the availability of half-year financials, making an H1 FY26 comparison structurally valid.
Paytm vs Phonepe: Payments scale during H1 FY26
During H1 FY26, PhonePe reported Customer Total Payment Value of Rs 73.70 lakh crore, with 5,340 crore customer transactions. Merchant payments contributed Rs 8.51 lakh crore of transaction value and 2,496 crore transactions over the same period.
Paytm disclosed aggregate payment volumes for H1 FY26 in its statutory results, although detailed segmentation is provided primarily on a quarterly basis. The availability of half-year aggregates allows directional comparison of payment throughput across the same period.
Separately, UPI market share is disclosed as a point-in-time metric. As of September 2025, NPCI data cited in company disclosures showed PhonePe accounting for 49.15% of customer-initiated UPI transaction value, while Paytm accounted for 5.93%.
Payments and monetisation
| Metric | Paytm | PhonePe |
| Net payment revenue | ₹1,123 crore (₹529 cr Q1 + ₹594 cr Q2) | – |
| Financial services revenue | ₹1,172 crore (₹561 cr Q1 + ₹611 cr Q2) | ₹452.63 crore |
Paytm vs Phonepe: Network size
User and merchant counts are stock measures, making point-in-time comparison appropriate.
As of 30 September 2025, PhonePe reported 65.76 crore life-to-date registered users, with 23.78 crore Monthly Active Customers and 10.66 crore Daily Active Customers.
Paytm reported an average of 7.5 crore Monthly Transacting Users for Q2 FY26. The company does not disclose daily active user counts in its public filings.
On the merchant side, Paytm reported 4.7 crore registered merchants and 1.37 crore active merchant device subscriptions as of 30 September 2025. PhonePe reported 4.72 crore registered merchants, with 1.11 crore Monthly Active Merchants and 91.9 lakh net payment devices deployed.
Phonepe vs Paytm: Network and devices (point-in-time)
| Metric | Paytm | PhonePe |
| As of | 30 Sept 2025 / June 2025 | 30 Sept 2025 |
| Monthly transacting / active users | 7.5 crore MTU (Q2 FY26 avg) | 23.78 crore MAC |
| Registered users | – | 65.76 crore (LTD) |
| Registered merchants | 4.7 crore | 4.72 crore |
| Merchant devices | 1.37 crore subscriptions | 91.9 lakh deployed |
| YoY device growth | 22% | – |
| Coverage | Nationwide | 98.61% of pin codes |
Paytm vs Phonepe: Merchant device strategy and distribution economics
Merchant devices are a core distribution layer for both companies, but their scale and monetisation approaches differ.
As of 30 September 2025, Paytm reported 1.37 crore merchant device subscriptions, representing 22% year-on-year growth. The company added approximately 25 lakh subscriptions over the preceding twelve months and operated a merchant sales workforce of 44,154 personnel.
PhonePe reported 91.9 lakh net payment devices deployed, supported by 25,657 sales staff and 31,019 channel agents, with deployment across 98.61% of Indian pin codes.
| Merchant device metrics (as of 30 Sept 2025) | Paytm | PhonePe |
| Device base | 1.37 crore subscriptions | 91.9 lakh deployed |
| YoY growth | 22% | Not disclosed |
| Sales workforce | 44,154 | 56,676 |
| Geographic coverage | Nationwide | 98.61% of pin codes |
Paytm emphasised refurbishment to manage device costs. Madhur Deora, President and Group CFO, One97 Communications Limited, stated during the Q2 FY26 earnings call, “Refurbishment definitely increases the life of the device. It saves us, I mean, the average cost of refurbishment including reverse pickup costs will be somewhere to the order of 25% to 30% of the cost of a new device.”
PhonePe disclosed that device revenue is generated through setup fees and recurring subscriptions, with revenue recognised over contract periods and deployment in smaller towns supported by incentives under the RBI Payment Infrastructure Development Fund.
Paytm vs Phonepe: Monetisation and financial services integration over H1 FY26
For H1 FY26, PhonePe reported Rs 452.63 crore in revenue from lending and insurance distribution, reflecting 108.79% year-on-year growth.
Paytm disclosed financial services distribution revenue for H1 FY26 in its statutory results, with management commentary emphasising growth in merchant loans and equity broking. Where additional clarity is required, Paytm’s Q2 FY26 disclosures show Rs 611 crore in financial services revenue, with more than 50% of merchant loans issued to repeat borrowers.
Vijay Shekhar Sharma, Founder and Chief Executive Officer, One97 Communications Limited, stated during the Q2 FY26 earnings call, “We basically do not have any option for paying later. It is a charge card equivalent.”
Paytm vs Phonepe: Lending structures
A key structural difference between the two companies lies in credit risk allocation.
PhonePe distributes credit through its subsidiary PhonePe Lending Services Private Limited under Default Loss Guarantee arrangements capped at 5% of loan disbursals. As of 31 December 2025, Rs 1,032 crore of Assets Under Management were covered under DLG arrangements.
As of 30 September 2025, PhonePe had placed Rs 27.99 crore of fixed deposits under lien to collateralise these guarantees. During H1 FY26, the company recognised a financial guarantee liability of Rs 38.50 crore and impairment provisions of Rs 34.90 crore in its profit and loss statement. No DLG invocations occurred during the period.
PhonePe stated in its DRHP, “In case of defaults by borrowers, our Subsidiary, PLSPL will have to compensate such lenders up to the specified percentage.”
Paytm does not operate a DLG-backed lending model. Its credit offerings are structured as distribution arrangements with partner banks, without balance-sheet guarantees or collateral placement.
How the 5% DLG cap affects lending expansion
The 5% DLG cap limits PhonePe’s maximum exposure per lending portfolio but does not eliminate balance-sheet commitments. Each increase in DLG-covered lending requires proportional increases in restricted cash, recognised guarantee liabilities, and impairment provisions, as disclosed for H1 FY26.
As lending volumes expand, capital is tied up regardless of whether defaults occur. This links future lending expansion to available liquidity and capital buffers rather than solely to borrower demand or partner bank appetite.
Paytm vs Phonepe: Wealth platforms
Paytm operates its wealth offerings through Paytm Money Limited. For Q2 FY26, 6.5 lakh customers utilised financial services, including equity broking. Paytm excludes users engaged solely in mutual fund distribution from its core financial services customer definition due to limited revenue contribution.
PhonePe operates Share.Market through PhonePe Wealth Broking Private Limited. As of 30 September 2025, Share.Market had opened 12.6 lakh demat accounts, with 37.48% sourced through the PhonePe app. Mutual fund assets under management stood at Rs 5,838 crore, with 23.3 lakh SIPs executed monthly.
PhonePe stated in its DRHP, “Share.Market’s right to win is anchored in providing quantitative research and assistance, seamlessly embedded across all product flows.”
Conclusion
On an H1 FY26 basis, Paytm and PhonePe display distinct approaches to monetisation, risk allocation, and earnings visibility. Paytm disclosed half-year financials showing improving profitability, supported by merchant subscriptions and financial services distribution, and provided additional operating detail at the quarterly level. PhonePe disclosed higher transaction volumes and higher revenue for H1 FY26, alongside statutory losses and balance-sheet commitments arising from Default Loss Guarantee arrangements and infrastructure deployment.
With PhonePe preparing for listing and Paytm already listed, the contrast between transaction dominance and financial outcomes is observable through disclosed data. All comparisons in this article rely primarily on H1 FY26 disclosures, supplemented by point-in-time metrics as of 30 September 2025, and quarter-specific Paytm data only where no half-year equivalent exists.