The Indian UPI landscape has recorded some great improvements in December 2024, with both PhonePe and Google Pay consolidating their stronghold on the country’s transaction volumes. According to recently released data, PhonePe alone accounted for as much as 47.7% of total transaction volume share, followed closely by Google Pay at 36.7%, while Paytm managed to find only 6.87% of the action.
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In December, PhonePe clocked a remarkable 7.98 billion transactions, aggregating to a total transaction value of ₹11.76 lakh crore. Google Pay also performed well with 6.1 billion transactions worth ₹8.22 lakh crore. On the other hand, Paytm was quite behind the rest, having clocked only 1.15 billion transactions amounting to ₹1.25 lakh crore.
This suggests that the PhonePe and Google Pay ecosystems have competitive strengths, which not only ensure them to hold the top line in terms of numbers but also by value. A strong growth trend is seen by these platforms while they continue to evolve with changing digital payments paradigms.
Latest numbers show a minor growth in market share for both PhonePe and Google Pay as compared to November, whereas Paytm faced a drop. Paytm’s market share had fallen from 6.95% in terms of volume and 5.48% in value to the present numbers, showing some challenges to the platform to stay ahead of its competitors.
Notably, the lack of growth in Paytm’s UPI market share is of particular concern, especially considering that the company had received clearance to add new customers in October. This stagnation has worried investors, and there’s seen a decline of 7.5% on Paytm’s share prices after the results for transactions were released.
While PhonePe and Google Pay are the market leaders, other players are also making their mark in the UPI space. Navi has emerged as the fourth largest player in terms of UPI volume, processing 202.53 million transactions valued at ₹11,317.09 crore. In addition, Cred reported 143.07 million transactions, contributing ₹50,979.94 crore to the ecosystem.
WhatsApp, after increasing its UPI services, in December saw 57.7 million transactions worth ₹4,348.19 crore, confirming its stance as an increasingly more relevant player in the market.
As the competitive dynamics intensify in UPI, the NPCI has now decided to extend the timeline for Third Party Application Providers (TPAPs) crossing the volume cap by two years. The regulatory decision aims to create a level-playing field within the rapidly growing digital payments sector. Additionally, the NPCI has allowed Meta-owned WhatsApp to offer UPI services to its whole user base from India, and this factor further increases the competition.
December 2024 UPI transaction data portrays the stronghold of PhonePe and Google Pay within the Indian digital payments landscape but shows Paytm struggling to gain back the market share. As competition is bound to heat up and new entrants emerge, Paytm needs to be able to rethink its strategies for regaining lost ground in the rapidly evolving marketplace. Developments in the UPI sector would be a signal of a truly vibrant digital economy, with significant headroom for growth and innovation for years to come.
