Paytm's UPI market share drops to 9%, lowest in 4 years

Paytm has witnessed a significant downturn in its unified payments interface market share, dropping to a mere 9% in March, as per data released by the National Payments Corporation of India, reported by Moneycontrol.

This slump marks Paytm's lowest market share in the past four years, reflecting a continuous decline since February when it stood at 11%. The decrease in February was attributed to regulatory constraints imposed on its affiliate, Paytm Payments Bank Limited, by the Reserve Bank of India.

NPCI began disclosing UPI app transaction volume and value in April 2020, with March 2024 recording Paytm's lowest market share yet.

The impact of regulatory measures is evident in the decline of Paytm's transaction value market share, which now rests at 6.7%, hitting its lowest point in recent years. Throughout 2023, Paytm's market share in terms of value hovered around 9%.

In contrast, PhonePe has emerged as the dominant player in the market, with its market share exceeding 50% for the past two months. Google Pay, holding the second position, has experienced a slight increase in its market share over the last year.

The decline in Paytm's market share is a stark contrast to its performance in 2018 and 2019 when the company boasted a substantial market share, hovering around 40%.

Since March 15, Paytm has transitioned to operate as a third-party application provider (TPAP), similar to competitors like PhonePe and Google Pay. This move has likely contributed to the decrease in market share.

To facilitate this transition, Paytm has partnered with Axis Bank, Yes Bank, SBI, and HDFC Bank as its payment service providers (PSP) for the TPAP service, replacing PPBL, which fulfilled this role until recently.