Paytm's market share in bill payments drops by 3 percentage points in 2 months

Paytm's market share in bill payments drop by 3 percentage points in 2 months

The embattled mobile payments firm One97 Communications Ltd, which runs Paytm, has been steadily losing value and volume market share over the past year or more in the country’s digital bill payment ecosystem, according to data available on the Bharat Bill Payment System (BBPS) website.

BBPS aggregates all the utility companies or billers on its platform and then connects them with banks and customer payment apps. More than 80 percent of all online bill payments in the country happen through the BBPS platform.

In March 2024, Paytm’s market share in bill payments dropped to 10 percent by volume or the number of bills paid. In January, before the RBI’s restrictions on its associate company Paytm Payments Bank Limited (PPBL), the company had a market share of 13 percent.

In value of all bills paid through Paytm, the Noida-based company’s market share dropped to 7 percent in March compared to 10 percent in January 2024.

While Paytm has been hit by the central bank’s punitive action on PPBL, the slide had begun much earlier. PPBL held Paytm’s mobile wallet license and was also powering the popular UPI payments on the Paytm app.

For instance, a year ago, Paytm had close to 14-15 percent market share in the bill payment value, which has been halved to 7 percent now.

Paytm facilitated 13 million bill payments in January 2023, which went up to 16 million in January this year, only to drop to 14 million in March 2024. The total number of bills paid on BBPS has gone up to 137 million in March this year from 100 million bills paid during January 2023.

In value terms, Paytm processed bills worth Rs 2,370 crore in March, compared with Rs 2,911 crore worth of bills it had processed in January.

Change in bill operations

The drop in Paytm’s bill payment market share in 2024 between January and March could also be because of the disruption caused by the loss of Operation Unit license, which PPBL held.

Paytm has partnered with Epay, the digital payment unit of US-based payment services firm Euronet Worldwide, to offer bill payment services through its application from March.

Because of the RBI action, Paytm has gone from being a BBPOU (Bharat Bill Pay Operating Unit) to an Agent Institution (AI). An OU license helps apps connect directly in to the BBPS system while an AI has to pass through another company that has an OU license; this slows down the bill payment process apart from increasing the risk of payment failures.

Paytm’s loss of bill payment market share also mirrors the situation the company finds in UPI payments as well. The company has lost five percentage points in market share in the last one year. Its current market share is a measly 8.4 percent in April this year, from 13.3 percent it held during April 2023.

Paytm has seen both PhonePe and Google Pay taking market share from it as well as from other payment apps.

UPI is the most popular digital payment method in the country and these two apps are the most widely used apps for that and the situation is being reflected on the bill payment market as well.

The UPI ecosystem is increasingly becoming duopolistic in nature as PhonePe and Google Pay now control close to 90 percent of all transactions that happen on the platform.