UPI App Market in India

Definition:

The Unified Payment Interface (UPI) is a system of transferring money from one bank account to another through a mobile application. This system was developed by NPCI in India and allows consumers to make hassle free transactions through their mobile phones. It also eliminates the need to enter sensitive information like pin, password etc. for each transaction. It is a form of peer to peer / peer to merchant money transfer. 

UPI Market share in India:

As per the government’s economic survey the digital payments in the FY 2022 were to the tune of 8,840 crores. Of this, UPI accounted for nearly 52% with a total value of Rs. 126 lakh crores. Whereas, in the financial year 2019 UPI accounted for just 17% of the total digital transactions. This signifies rapid adoption of technology that was launched just 6 years back in the year 2016. The average growth in UPI transactions from FY 19-22 was at 121% in terms of value. Here’s a look at the NPCI data that reveals the YOY growth in UPI transactions in India from 2017 onwards. 

 

Top 10 UPI players in India:

Together PhonePe, Google pay and Paytm hold 95% of market share in India’s UPI transactions. As per the data released by NPCI in its pre-budget survey of FY 22 we have enlisted the top ten players in the Indian UPI market. 

1) PhonePe:

With a maximum market share of 48.5% PhonePe is the market leader in its category. It was founded by Sameer Nigam and Rahul Chari in the year 2015 and since then there is no looking back for this digital payment app in India. It partnered with Yes Bank in the year 2016 to launch its UPI. It effectively allows you to transfer money, make recharges and pay bills. In addition to that it also allows the user to invest in gold and mutual funds. It is a unified application and therefore the user can order food, make travel reservations or order daily needs without having to download a separate app. As per the CEO, Sameer Nigam, PhonePe is aiming for an IPO in the year 2024-25.

2) Google Pay

At number two we have Google Pay. It has the highest installation count in India and accounts for 34% of the total market share as per NPCI data of 2022. Google Pay claims to give the user helpful ways to spend more with their money. The digital wallet once linked to your bank account works just like card or cash for payments at different touch points. Be it a local vendor or used for international payments. It protects the account with multiple layers of security. For international payments you have to link your Wise account with Google pay account and you are good to go. This service was introduced in 2013. In addition to hassle free transactions Google Pay also surprises users with vouchers and coupons. 

3) Paytm

With a 10.4% market share Paytm is 3rd in the category. It offers the maximum options for which the wallet can be used for. From vendor payments to tax payments. Paytm was founded by Vijay Shekhar Sharma in the year 2011. Post demonetization and during covid crisis, Paytm became a household name. It has added 400 million users and 25 million transactions daily. It has done critical work on boarding maximum road side vendors and small stall operators.  across India. As soon as you’ve finished eating your chaat or bought your vegetables from the local vendor you will seek their Paytm scanner to make your digital payment. 

4) Cred

Cred is a reward based credit card payments app where all credit card bills can be made at one place. It also rewards members through cash backs for on time payment of credit card bills. It was founded by Kunal Shah in the year 2018 and is headquartered in Bangalore. One major feature about the app is that it informs the clients about the hidden charges associated with the credit card bills. It is a member only platform and not all can join. To be able to join Cred the credit card score of the person should be over 750.  Cred enjoys 1.7% of the total market share of UPI payments in India.

5) Yes Bank

Yes bank allows its account holders to use Yes Bank UPI services by linking their mobile number to the bank account. User needs to create a UPI pin using the debit card and use the Yes Bank UPI pin to carry on with day-to-day digital transactions. The UPI transaction limit is set at 1 lakh by NPCI but banks may vary the same as per their policy. As per NPCI, Yes bank is also the payment partner for about 20 different apps. This makes most money go through Yes bank one way or the other. The bank also claims to have 43% market share of UPI.

6) ICICI

Pockets is a VISA powered e wallet that can be used by the customers of any bank. It can be used for recharges, payments and shopping online or offline. It allows users to transfer money to any email id, mobile number, friends on FB and bank accounts. Launched in 2015, it is the first of its kind app on Facebook. It was launched to target the youths. It is protected by a 4 digit numerical password. To avail the service account holders will have to link their bank accounts to the app using a login ID and fingerprint access. This will generate a UPI ID that can be used for all cashless mobile transactions across various touch points. 

7) Bharat Interface for Money – BHIM

Bhim was launched and is managed by NPCI. It enables fast, secure and reliable cashless payments through a mobile app. Bhim was launched by the same entity that launched UPI technology in India. It secures 7th position as per the market share that is of mere 0.7%. The BHIM advantage is that it was created with the India Demography in mind to encourage cashless transactions amongst Indians. It was launched in December 2016 and is available in 20 different languages. 

8) Amazon Pay

Launched in 2007, Amazon Pay is an online payment processing service powered by Amazon. It rides on the user base of Amazon.com and gives the user an option to pay to external merchants as well using their online wallet. It started with highlighting the main benefit as faster checkout for amazon wallet users. Later the no. of options were not juts restricted to merchant payment but now users can use the same for various third party transactions including donations and friendly transfers. Presently it caters to 0.6% of the total market share of UPI payments in India.

9) Payzapp

The mobile payment app by HDFC is Pay Zapp. It was revamped and launched in the year 2015 to take on the big players like Googel pay and Aamzon pay. Like all other digital wallet it allows you to make online and offline transactions without having to use any card or bank account. The customers can link both debit and credit card to this account. It is powered by both Visa and MasterCard. Customers of other bank accounts can also use Payzapp. They claim to have the lowest service fee at 0.39%+GST and use it as their USP. Presently it has 0.4% of the total market share as per NCPI data of 2022.

10) YONO

YONO by SBI was launched in the year 2017. It has over 6crore registered users and finds its place at number 10 with a market share of 0.2% which is similar to ALLPAY payment gateway. It works for both phone and website. It provides flexibility of payments from anywhere at any time. YONO stands for “You need only one” where customers can integrate all its services from SBI – from bank account, credit card, insurance to securities. 

The table below shows the list of all UPI apps and their market share as released by NPCI in Oct 2022.

Future of UPI:

There are numerous benefits attached to using an online payment app. The transfers are contactless, fast, secure and transparent. As the dependency on digital wallets increases the user becomes dependent on such allied services to be able to conduct smooth transactions. They need good speed internet connectivity, may face technical glitches and are also prone to cyber theft. But despite these challenges India is one of the leading countries in terms of UPI adoption. 

As per the BCG report released in 2022, India’s digital payment market which is at USD 3 trillion at present has a USD 10 trillion opportunity by 2026. Digital payment is likely to constitute 65% of all payments by the year 2026. In 2021 UPI adoption was at 35% and is likely to go up to 75% in the next five years as the BCG report. Tier 3-6 cities have shown great potential for further growth of the digital payment system in India. As more and more people begin to explore digital payments, it will unlock significant increase and change in the access to credit and digital payment acceptance across the whole of India. The report also states that by 2026 2 out of 3 transactions will be non-cash in nature. We may see more players rising and changes in the current structure of market share within the existing players. MyGovIndia data shows India tops the digital payments ranking globally. 46 per cent of the global real-time payments in 2022 were from India. This accounts to 89.5 million transactions in the country last year. Brazil lags far behind at the second place with 29.2 million transactions during the same time. Followed by China, Thailand and South Korea in the 3rd, 4th and 5th place respectively. Given these data we can clearly see that India is a leader in the digital payment space globally.