Razorpay-backed POPclub's UPI transactions slump as incentive pullback hits hard

POPclub sees UPI transaction volume slump by over 80 percent

• POPclub's UPI transactions fell 85 percent after ending cashback incentives
• POPclub shifts to merchant-funded rewards, prioritizes quality customers over cashbacks
• Razorpay invested $30 million in POPclub to expand its consumer UPI offerings

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Razorpay-backed UPI payments startup POPclub’s monthly transaction volumes have seen a dramatic fall after phasing out of cashback incentives.

POPclub’s monthly UPI transaction volumes reached a high of 63.7 million in July 2025 but dropped sharply to 9.5 million by December, down 85 percent, according to data available with the National Payments Corporation of India, which operates UPI.

The company’s data shows a gradual rise in transactions from 8.1 million in January to 13.6 million in May, followed by a surge to 32.3 million in June and the subsequent peak in July.

Volumes remained erratic over the next three months before plunging to 15 million in November and 9.5 million in December.

“This is a conscious narrative shift. We are moving away from aggressive, cashback-driven rewards... Our core vision has not changed. We believe in quality customers, especially young, online shoppers. Cashback-led growth was a distraction, and we do not want to scale in that way," POPclub founder and CEO Bhargav Errangi told Moneycontrol.

Razorpay backing

POP is a Bengaluru-based fintech startup launched in 2023 by Errangi, a former Flipkart senior executive.

The platform operates a rewards-first UPI app that integrates payments, commerce and a co-branded RuPay credit card, enabling users to earn POPcoins, a merchant-funded rewards currency, on transactions and purchases.

Last year, full-stack payments firm Razorpay invested around $30 million (about Rs 259 crore) to acquire a majority stake in POP, marking its entry in the consumer UPI ecosystem and expanding beyond its core B2B payment infrastructure business.

The funding was aimed at strengthening POP’s product offerings, expanding merchant partnerships across direct-to-consumer and lifestyle categories, and enhancing its merchant-funded POPcoins rewards programme.

Also Read: Razorpay enters consumer UPI space, leads $30 million investment in payments platform POP UPI

Incentives, festival season experiments

Errangi said the customers who came to the platform during the cashback period were not translating into long-term revenue-generating customers.

“Other TPAPs have much larger financial muscle, and they are following a merchant-funded reward strategy. During the festive month, we invested in cashback only to understand the approach. If we had not done that, we would have reached 120 million by now but that growth would have been purely driven by cashback and not by real revenue channels," Errangi said.

According to him, cashbacks were wasting company's resources without building sustainable value, and it was a conscious decision to stop the initiative.

Merchant-led rewards over cashbacks

Errangi reiterated that POP’s focus remains on a merchant-funded rewards model rather than platform-funded cashbacks.

“With UPI, you can earn through the merchant channel, but cashback is essentially just burning money. Popcoins can be burned, but the value has to come from the merchant ecosystem,” he said.

Industry sources told Moneycontrol that third-party UPI apps have deeper pockets and are deploying merchant-funded reward strategies but POP’s approach prioritises long-term sustainability.

Focus shifts to quality customers

Many players are now focusing on organic growth, as cashbacks dent financials.

Moneycontrol reported that Flipkart group's super.money’s growth stagnated after a year of blistering growth, with its market share remaining flat at 1.3 percent for five consecutive months.

NPCI’s subsidiary BHIM and Sachin Bansal-led Navi’s market share has continued to grow since July.

BHIM increased its market share to 0.7 percent in December, up from 0.4 percent in July. Navi grew to 3.1 percent from 2.2 percent.

Market leaders PhonePe and Google Pay continue to maintain their market share of 45 percent and 34 percent, respectively.

“UPI players, especially newer entrants, need to focus on organic growth. While PhonePe and Google Pay already have scale, and some well-funded players can still afford to run cashback programmes, many platforms, including POP, have been able to improve revenues by scaling back on cashbacks,” another founder said.