The share of transactions made through the Bharat Interface for Money (BHIM) app in the overall pie of Unified Payments Interface (UPI) payments shrank to 8% in November from over 47% in July, showed data released by the National Payments Corporation of India (NPCI). However, the picture is different when we look at the value pie. Despite the sharp decline in volume share, BHIM still accounts for over 26% of all UPI transactions by value. A closer study reveals that the average value of a BHIM transaction has risen to Rs 3,109 in November from Rs 2,945 in July. Over the same period, the average value of a UPI transaction has dropped to Rs 921 from Rs 2,955.
In other words, while BHIM is definitely feeling the heat from new competitors as far as volumes go, it is still holding on to a loyal set of users who are expanding their usage. Analysts say this is a natural fallout of an increase in UPI adoption and the entry of other players into the space. Vivek Belgavi, partner and fintech leader at PwC India, said other players have in fact helped increase UPI usage. “Overall, UPI is gaining traction and there are a couple of more players in queue like WhatsApp, which have not yet come into the market. But from a big-picture perspective, it’s UPI which was the key platform that the government and the NPCI wanted to promote and BHIM was a tactical step to offer a solution while demonetisation was happening.”
Google India is expected to reveal numbers of its transaction volumes on Tuesday. Another long-time challenger to BHIM has been Flipkart-owned PhonePe, which now accounts for about 31% of all UPI transactions by volume. Hemant Gala, head of bank relations & strategic alliances, PhonePe, told FE that total transactions on the platform rose to 33 million in November from 16 million in September. “We are at Rs 40,000 crore total payment volume (TPV) annual run rate and our target is to get to Rs 80,000 crore by February 2018,” he added. The volume of transactions on UPI rose 37% in November (over October this year) to 105 million. The value of transactions in November stood at Rs 9,679 crore, also up 37% month-on-month.