Is the Dominance of PhonePe and Google Pay in Online Payment Services Fading?

PhonePe and Google Pay Lose Ground as Smaller UPI Players Gain Traction in June

Walmart Inc.-owned PhonePe and Alphabet Inc.’s Google Pay experienced a slight decline in their shares of India’s unified payments interface (UPI) transactions in June. Meanwhile, smaller players gained momentum.

PhonePe’s UPI transaction share dipped to 48.37% from 48.67% in May. Similarly, Google Pay’s share fell to 36.76% from 37.18%, according to the National Payments Corporation of

India (NPCI). The UPI network processed a total of 13.88 billion transactions in June, marking a 1% decrease from the previous month.

UPI, managed by the state-backed NPCI, enables instant money transfers by linking banks with fintech apps like Paytm, PhonePe, and Google Pay.

Recently, new players have entered the UPI payments arena, challenging the dominance of PhonePe and Google Pay, which together control over 80% of the market.

For example, UPI transactions on Axis Bank Ltd.’s apps surged 17% to 75 million in June, while the Navi app saw a 20% increase, reaching 35.7 million transactions. Additionally, Flipkart, PhonePe’s sister company, launched a new UPI service called super.money. Mukesh Ambani’s Jio Financial Services also joined the competition with its JioFinance app, aiming to capture a share of India’s growing fintech market.

Despite facing regulatory challenges, Paytm maintained its 8% market share from the previous month, indicating a stabilization from its 13% share at the beginning of the year. However, Paytm’s net loss for the fiscal first quarter through June more than doubled to 8.39 billion rupees ($100 million) after the Reserve Bank of India imposed a near-shutdown on its banking affiliate earlier this year.