IPO-bound PhonePe, Google Pay maintain UPI ecosystem dominance in May

Digital payments majors PhonePe and Google Pay continued to dominate the Unified Payments Interface (UPI) ecosystem in May, holding significant market shares in terms of both volumes and value, according to data from the National Payments Corporation of India (NPCI).

On its way to listing on the Indian exchanges, PhonePe cornered half the UPI market last month. The fintech saw Rs 12.56 lakh crore change hands in 8.7 billion transactions, accounting for 50% and 47% of the overall UPI value and volume during the period.

Google Pay logged over 6.7 billion transactions worth Rs 8.85 lakh crore as the second-largest UPI platform in May. The UPI platform handled 37% of the volume and over 35% of the value of the entire ecosystem last month.


One97 Communications-run Paytm was a distant third with 1.27 billion UPI transactions worth Rs 1.38 lakh crore, accounting for 7% volume and 5.55% value.

Sachin Bansal-owned Navi and Flipkart’s super.money emerged as the fourth and fifth largest UPI apps after Paytm.

Leading UPI app PhonePe gets 95% of its revenue from digital payments, and UPI payments are a core aspect of that business, ET reported on May 19. Meanwhile, merchant payments company Pine Labs, which is set to file its draft IPO papers this month, gets a significant share of payments via UPI. UPI accounts for a significant chunk of business for Razorpay too, which is also planning to go public by 2026.

UPI processed 18.68 billion transactions in May, rising 4.4% in a rebound from a decline in April, according to data released by the NPCI. By value, transactions via UPI totalled Rs 25.14 lakh crore last month, up from Rs 23.95 lakh crore in April.

UPI has grown rapidly since its launch in 2016. However, the platform’s breakneck growth has started to slow as it approaches saturation, ET reported on April 7.

Also Read: Slow start: Why UPI Lite, wallet-based payments are yet to take off?

UPI monetisation hiccups

UPI platforms had their hopes dashed after the of reinstating the merchant discount rate (MDR) on transactions through them, hitting shares of listed payment firms. Paytm shares closed 1.46% lower at Rs 882.10 per share, while Mobikwik shares dropped 2.85% to Rs 266.35 per share.

ET reported on June 13 that payment firms are going to see a disruption in their potential monetisation plans, with the government clarifying that it is not bringing back MDR.