The regulatory measures imposed on Paytm Payments Bank by the Reserve Bank of India (RBI) have had a direct impact on Paytm’s market dominance in India. Since the announcement of the ban on January 31, 2024, each passing week has brought forth a noticeable decline in various essential metrics crucial to Paytm’s performance, including app downloads, Weekly Active Users (WAUs), and overall user engagement.
According to data from Sensor Tower, Paytm’s mobile app downloads declined a significant 24% WoW during the week of February 5, 2024, immediately following the RBI order. In stark contrast, BHIM, one of Paytm’s rivals, witnessed an astonishing 125% WoW surge in app downloads during the same period.
However, PhonePe faced a similar reaction to Paytm, with app downloads falling 23% WoW during the week of February 5, 2024. Meanwhile, Google Pay and Airtel app downloads remained largely flat.
The decline in Paytm app downloads persisted into the following week, February 12th, 2024, with a further decrease of 9% WoW. However, a semblance of stability emerged over the subsequent two weeks as downloads increased 5% and 5% each WoW for the weeks of February 19 and February 26, respectively.
Zooming out to observe the broader picture, Paytm app downloads for the week starting February 26, 2024, declined a massive 56% YoY compared to the same week in 2023. Although this pronounced decline may be attributed to various other factors, the RBI’s regulatory directives undoubtedly played a pivotal role.
In addition to experiencing a decline in app downloads, Paytm has also faced a notable decrease in user engagement with its app.
The number of Paytm’s weekly active users (WAUs) declined an average of 3% WoW between February 5, 2024, and March 2, 2024.
Specifically, during the week of February 26th, 2024, Paytm witnessed an 11% decline in its weekly active users compared to the week of January 29, 2024, when the RBI announced the ban on PPBL. On a yearly basis, Paytm’s WAUs were down by 6% during the week of February 26, 2024.
The decline in Paytm’s WAUs contrasts with the relatively unchanged WAUs observed among its competitors, including PhonePe, Google Pay, and Airtel, during the same month period. However, BHIM, an app developed by the National Payments Corporation of India, saw an impressive 11% increase in WAUs during the week of February 26th, 2024, compared to the week of January 29, 2024.
Paytm UPI Market Share
Despite the entry of various new players, PhonePe, Google Pay, and Paytm Payments Bank continue to exert significant control over India’s UPI app market, collectively holding a market share of around 95% as of February 2024. However, Paytm’s UPI share has declined to 11% in February 2024, compared to 15% a year ago.
The fintech company is actively taking measures to ensure the continuity of its services for its users. Paytm has formed partnerships with four banks, securing five handles to facilitate UPI transactions. Among these handles, the company’s existing handle @paytm is included, allowing users to continue using it without requiring any modifications on their end. The National Payments Corporation of India (NPCI) has granted approval for @paytm and a closed user group UPI handle @ptyes for Paytm in collaboration with Yes Bank.
With these collective efforts in mind, it will be interesting to see how Paytm will bring back trust among Indian users for its UPI and other banking services.
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