Paytm's UPI Market Share Hits Four-Year Low Amid Regulatory Challenges

10 Apr 2024 , 11:41 AM

One97 Communications Ltd (OCL), the parent company of the Paytm app, has experienced a decline in its unified payments interface (UPI) market share, dropping to nine% in March, as per data provided by NPCI, cited by Moneycontrol.

This marks the lowest market share for Paytm in the past four years, following a drop to 11% in February, attributed to regulatory restrictions imposed on its affiliate, Paytm Payments Bank Limited (PPBL), by the Reserve Bank of India (RBI).

NPCI began disclosing UPI app transaction volume and value in April 2020, with this period representing Paytm’s lowest market share.

In February, Paytm saw its UPI market share decline to 11%, down from 11.8% in January, prior to the onset of the payments bank crisis.

Paytm’s transaction value market share has also witnessed a decline, now resting at 6.7%, marking its lowest point in recent years. Throughout 2023, Paytm maintained a market share of approximately nine% in value.

Conversely, PhonePe has achieved a volume market share exceeding 50% in the past two months, while Google Pay has experienced a modest increase in its market share over the last year.

In 2020 and 2021, Paytm held approximately 11-12% of the transaction volume market share, which incrementally increased to 13% before declining to nine%. In contrast, in 2018 and 2019, the company boasted a substantial market share in UPI transactions, hovering around 40%.

Since March 15, Paytm has operated as a third-party application provider (TPAP), shifting from its previous role as a payments bank app. This transition likely contributed to the decrease in market share.

To facilitate this transition, Paytm has enlisted Axis Bank, Yes Bank, SBI, and HDFC Bank as its payment service provider (PSP) partners for the TPAP service, replacing PPBL, which previously fulfilled this role.

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