Paytm Maintains Footing in UPI Market Despite Restrictions

Preeti Bali / 7:05 am / July 9, 2024

Paytm, a pioneer in QR-based payments and digital sound payments (Soundbox), appears to be regaining its footing in the Unified Payments Interface (UPI) ecosystem. The company has managed to hold onto its market share for two consecutive months, defying initial concerns following restrictions on user onboarding.

Consistent Performance

According to a document obtained by Entrackr, Paytm secured over 8% of the total UPI transaction market share in both May and June 2024. The total number of transactions on the Paytm platform in June remained steady at around 1.1 billion, mirroring the figures from May.

Third-Largest Player

Since transitioning to a Third-Party Application Provider (TPAP) status in March, Paytm has successfully maintained its position as the third-largest player in the UPI market. PhonePe and Google Pay continue to dominate the landscape, but Paytm has held its ground.

Transaction Value Remains Strong

 In terms of transaction value, Paytm processed Rs 1.2 trillion worth of UPI transactions in June, replicating its performance from May. This stability underscores Paytm’s continued relevance, particularly in the peer-to-merchant (P2M) segment, where its extensive network of merchants remains a significant advantage.

Market Dynamics 

While Paytm has shown signs of recovery, the overall UPI market witnessed a slight decline. The total transaction volume dipped marginally by 1% in June, reaching 13.9 billion compared to 14 billion in May. Similarly, the transaction value experienced a small decrease, going from Rs 20.45 lakh crore in May to Rs 20.07 lakh crore in June.

Market Leaders and Transparency

NPCI, the governing body for UPI, has yet to disclose the latest volume and value breakdown for PhonePe and Google Pay. However, in May, these two platforms held a commanding market share, accounting for 48.6% and 37% by volume, respectively.

Strategic Partnerships and Innovation

 Paytm’s UPI offerings are bolstered by strategic partnerships with major banks like Axis Bank, HDFC Bank, State Bank of India (SBI), and YES Bank. Additionally, the company has introduced innovative features like UPI Lite and the integration of Rupay credit cards on UPI, further enhancing user experience.

Potential Regulatory Shift

Reports suggest that NPCI might be considering a review of the existing 30% market share cap imposed on third-party UPI apps like PhonePe and Google Pay. This potential change could reshape the competitive landscape in the UPI market.


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