Walmart-backed PhonePe has pipped Google Pay for the first time to become India’s leading Unified Payments Interface or UPI-based digital payments platform with 835 million transactions in the month of October.
PhonePe said that it has recently seen a surge in its transactions as more offline shops opened and consumers and merchants opted for a digital alternative to complete transactions.
“We are on a mission to make digital payments a way of life for every Indian citizen, and our next target is to cross 500 million registered users by Dec 2022,” Sameer Nigam, chief executive and founder of PhonePe said in a statement.
“In line with our brand ethos of ‘Karte Ja. Badhte Ja,’ (Hindi for keep working and growing) we continue to launch new and innovative products for every strata of Indian society, as well as enable digital payment acceptance across every merchant in every village and town in India,” Nigam added.
PhonePe recently added a range of financing services, including 600,000 insurance policies, which also played a role, it said.
This comes at a time when the country’s overall UPI-based transactions saw two-fold growth in monthly volumes to cross 2 billion in October worth Rs 3.86 lakh crore or $51.8 billion. The UPI channel recorded 1.8 billion transactions in September and 1.6 billion transactions in August.
UPI channel, which went live in April 2016, now processes higher volumes than debit and credit cards put together, as per data from the Reserve Bank of India. India demonetised Rs 500 and Rs 1000 currency notes on November 8, 2016, which resulted in a quick adoption of digital payment services, especially UPI-based apps.
Google, which has been dominating India’s UPI transaction ecosystem, saw its payment service slip to the second position with 820 million transactions in October.
Paytm, on the other hand, stood at the third spot with about 245 million transactions, followed by Amazon Pay with about 125 million transactions.
The UPI payments infrastructure, built by India’s largest banks, is operated by the National Payments Corporation of India (NPCI). Currently, there are over 174 banks live on the UPI channel.
India’s NPCI recently expressed its ambitions to export the UPI to global markets including Singapore, UAE and Myanmar, according to media reports.
UPI has become the most popular digital payments method in the country due to its open architecture which allows interoperability among all participating payments apps.
Industry watchers said that the pandemic has forced Indians to adopt digital payments, leading to the surge in volume in the month of October. They added that ongoing festive season sales and a gradual recovery of the consumer economy also drove the growth.
India’s digital payment industry is now preparing for WhatsApp Pay’s entry. WhatsApp will take on 2 companies that offer UPI-based digital payments service through their applications in India, as per the NPCI website.
WhatsApp, which received clearance for testing for its payment service in early 2018, recently said that it fulfilled NPCI’s mandated data localisation laws in India. It, however, is still awaiting the final nod from the RBI.