Walmart-owned PhonePe and SoftBank-backed Paytm have both claimed market leadership in February 2021 in India’s intensely competitive digital payments space.
While Paytm claimed on March 1 that it has crossed 1.2 billion monthly transactions across payments methods such as Wallet, UPI, cards and internet banking, PhonePe staked its claim for digital payments market leadership on March 2, with over 1.07 billion transactions across UPI, Cards, and Wallets.
While Paytm said this growth came on the back of strong growth in offline payments and financial services, PhonePe said it witnessed a surge in offline payments across Tier-2 and Tier-3 cities, having already digitised over 17.5 million kiranas. Paytm said 17 million merchants use its Paytm for Business app.
On average, India clocks 3.3 billion digital transactions per month across various payment methods: UPI, credit cards, debit cards, wallets. Data from NPCI, which operates the UPI payment railroad, shows that there were 2.29 billion transactions in February. While the breakup for the UPI apps is not yet available for the month, PhonePe has enjoyed a dominant market share in previous months, with Google Pay claiming second spot.
For instance, in January, PhonePe clocked 968.2 million transactions compared to Paytm, which saw 280 million UPI transactions.
In February, PhonePe processed 970 million UPI transactions and 98 million from cards and its wallet offering. If you add these two, the total transactions work out to 1,068 million transactions or 1.07 billion, which tallies with what PhonePe has officially stated. While Paytm’s UPI numbers have been growing due to a better user experience, this has mostly come at the expense of Google Pay and not PhonePe.
The standalone UPI numbers for Paytm for February are not currently available, but there is unlikely to be a huge variance within a month.
For Paytm, Moneycontrol assumed the following based on conversations with executives who track the sector: 280 million transactions from UPI (based on their January number), 400 million transactions from their wallet, 150 million transactions from cards, and 50 million transactions on Paytm Payments Bank. If you add these, it works out 880 million transactions, compared to the 1.2 billion number that Paytm has published.
It wasn’t immediately clear if the 1.2 billion number includes NEFT transactions, which would amount to a few million. It also wasn’t clear if this includes any UPI transaction that has Paytm Payments Bank on either side. For example, if a Google Pay user is paying a PhonePe user but the bank involved is Paytm Payments Bank.
Moneycontrol has sought more details from Paytm on the breakup of the numbers and will update this article once it responds.
This is not the first time PhonePe and Paytm have clashed, even as they compete with rivals such as Google, Amazon, and Facebook-owned WhatsApp. In 2018, PhonePe founder Sameer Nigam said in a blog that Paytm’s claim of being the biggest UPI player was “misleading”. Some of this hostility gave way to solidarity last year, after Paytm came under fire for being a ‘Chinese’ app as it counts Alibaba as a significant investor. Nigam then backed Paytm, stating that targeting Paytm because of Alibaba’s investment is absurd. He also backed Paytm in its fight against Google’s Play Store policies.