Paytm’s share in the Unified Payments Interface (UPI) market in India has declined for the fourth consecutive month, struggling to recover from a significant regulatory setback. In May, Paytm accounted for 8.1% of total UPI transactions, down from 13% in January, according to data from the National Payments Corporation of India.
The company faced a major blow in January when the Reserve Bank of India ordered Paytm Payments Bank Ltd. (PPBL), an affiliated banking entity, to wind down its operations. This regulatory action has resulted in Paytm’s shares plummeting by approximately 55% since then. Although PPBL isn’t directly controlled by Paytm, it is part of the fintech empire led by founder and CEO Vijay Shekhar Sharma.
UPI, operated by the state-backed National Payments Corporation of India (NPCI), facilitates instant money transfers by linking banks with fintech apps like Paytm, PhonePe, and Google Pay. In May, the UPI network processed a record 14.04 billion transactions, marking a 5.5% increase from the previous month.
PhonePe, owned by Walmart Inc., maintained its leading position in the market with a 49% share in May, while Alphabet’s Google Pay held a 37% share.
In response to the RBI order, Sharma has formed new partnerships with major Indian banks, including Axis Bank Ltd., HDFC Bank Ltd., and State Bank of India Ltd., to handle instant money transfers previously managed by PPBL. Despite these efforts, Paytm’s latest earnings report anticipates a short-term negative impact on revenue and profitability due to the disruptions faced in the fourth quarter.
