UPI transactions have been growing rapidly in India and the growth has further accelerated due to COVID-19. The total UPI transactions volume reached 2.3 billion in January 2021, amounting to INR 4.2 trillion in terms of value. UPI transaction volume increased by 76.5% YoY in January 2021 and transaction value surged by nearly 100%. The growth has been mainly due to increase in online shopping due to COVID-19 restrictions as well as online sales on platforms including Flipkart and Amazon.
PhonePe, the digital payment platform, owned by Walmart, held a majority share of 42.1% (or 968.72 million) in terms of volume, in January 2021, as per National Payments Corporation of India (NPCI). While, its closest competitor, Google Pay held a share of 37.1% (or 853.53 million). Together, both the companies dominate the UPI market in India holding 79.2% of the volume share.
PhonePe surpassed Google Pay by 47.54 million transactions for December 2020, becoming the largest player in the market, and this augmented to 115.19 million in January 2021. While PhonePe saw 3.9% rise in UPI transaction volume and 3.8% growth in transaction value in December 2020, Google Pay witnessed 11% decline in transaction volume in December 2020, as compared to the previous month.
In terms of value, PhonePe recorded INR 1.9 trillion in January 2021, while Google Pay recorded INR 1.8 trillion, during the same period. The two leading players are far ahead of other players in the market including Paytm, Axis Bank apps, Amazon Pay, and BHIM.
Further, PhonePe is aiming to have 500 million registered users by December 2022 as the company is focusing on pushing digitization in India. Also, by end of December 2021, the company intends to complete the roll out PhonePe for Business app to various merchants including Kirana stores. The company’s push toward digitalization is in line with India’s focus towards reducing reliance on cash.
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