Chipping Away: Amidst the UPI Boom, Paytm Looks To Navigate its Way

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As if it wasn’t on a roll earlier, the COVID-19 pandemic made the thrust to digital payments all the more prolific, important, and the ultimate need.

At the front and center, milking all that acceleration has been the UPI or United Payments Interface, India’s burgeoning digital payments bet.

Looking at the astronomical numbers which UPI has posted over the last 12 months, the growth in the payments volume has been directly proportional to of India’s financial technology players furthering their foothold in the desi land.


Dominating the market is the triumvirate of PhonePe, Paytm, and Google Pay. And despite the odd dip in numbers, it looks as though the top three are vying for an even bigger slice of the market.

According to NPCI, despite registering a marginal decline of 0.04% MoM in UPI transactions, it recorded a staggering 2.29 billion UPI transactions in the month gone by of February. These amounted to Rs 4.25 trillion in UPI transactional value.

Now, in this market of oceanic proportions, there is a strong undercurrent from the third-placed Paytm in the UPI domain. Amidst PhonePe keeping on its phenomenal stats, Google Pay taking somewhat a hit, Paytm has striven to make its voice heard in the competitive din.

A trifecta of reasons for the defiance.

  • The first and most obvious factor for Paytm’s growth in the UPI sector is the widespread adoption from merchants.

Traditionally having more foothold in the P2M segment than the P2P, the overall usage of UPI for commercial purposes in general across the country has seen Paytm gain momentum in the category. Not unsurprising, seeing as more than one-third of India has adopted Digital Payments.


As told by Narendra Yadav – Vice President, Paytm, P2M transactions constitute 70% of Paytm’s overall transactions, whereas the overall UPI share rounds up to 40%. With Google Pay slated to be more consumer-serving and PhonePe dipping its hand on both aisles of consumers and merchants, Paytm will look to leverage its dominance with the merchants. This, seeing as how digital transactions amongst merchants has only exceeded post the pandemic.

  • Secondly, boasting the lowest technical decline rate of 0.01% as compared to all UPI remitter banks and 0.04% as compared to all UPI beneficiary banks, Paytm is unchallenged in this regard. Having a Payments Bank is an added edge, leading to control over the entire stack, therefore equalling a sizeably lower failure rate. The removal of nagging payment-related issues adds that much more to the user experience and has helped in user adoption due to superior performance rate.

Paytm Payments Bank processed 340 million UPI transactions amounting to Rs 38,493 crore in February 2021.

  • The third factor has undoubtedly been new users and payers being added to Paytm’s UPI ecosystem. Evidence of this fact rets in how the Vijay Shekhar Sharma-led company has claimed to processes 1.2 billion transactions in the previous month.

Even as Paytm wriggles to make room for itself in the hotly contested UPI market, a look at the stats garnered by the rivals is proof enough that Paytm still has some way to go to grab a chunkier portion of the segment in India.

Checking boxes for more than 100 million monthly active users (MAUs) with an enviable 97% monthly customer repeat rate, PhonePe processed a billion monthly transactions in January 2021.

In January, Google Pay also went on to process 853.53 million transactions amounting to Rs 1.77 trillion. Stratospheric!

The work is clearly cut out for India’s most valuable start-up, who recently had its UPI handles approved by India stock regulator Securities and Exchange Board of India (SEBI). A neat trick, considering the multitude of IPO processes waiting in the wings on the Indian shores.

With Paytm pulling out all stops to gain on rivals in the UPI segment, the game is truly on!

Stay tuned for more updates.


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