Paytm or PhonePe : Which One Is Better?

When ATM revolutionized the way we exchange and handle money, would you believe that with the advent of digital wallets you will be able to do your transactions without cash or card in our pockets. Digital wallet or UPI (United Payments Interface) was launched in 2015 by the state owned National payments corporation of India (NPCI), the organization that manages all the digital payments in the country. It is quickly closing the gap with cards as the leading payment mode in India today.

E-wallets like Paytm and PhonePe quickly became a savior for the people after demonetization that place on November 2016. The rest we know is a history. India has now become a crowded digital payments space, with many platforms competing against each other to provide customers with the smoothest transaction experience. This article tries to compare the customer experience of two of the widely used payments application known as Paytm and PhonePe to understand what makes an app to fight the competition and regain their user base.

logos of both the apps
logos of both the apps


Paytm was marketed by Vijay Shekhar Sharma is a wunderkind of One97 Communication Ltd. which started in 2010. The main services of Paytm include bill payment for mobile, DTH services and online purchase. Paytm has now evolved as a sophisticated mobile payment application with a recorded 250M+ users in the past 8 years and a capacity of 5000 transactions per second.

The features that Paytm offers are:

  • Zero banking charge
  • Transaction limit of 1 Lakh for wallet along with UPI bank transfer.
  • RBI approved safe and secure digital wallet
  • The other basic utilities provided by Paytm are: Payments bank, Ticket booking for train, bus, flight and movies, UPI payments, etc.


PhonePe was formed by the former employees of Flipkart, Sameer Nigam and Rahum Chari in 2015. PhonePe in 2016, was the 1st Android app that provided UPI based user services. After 3 months of its launch, the app showed a record breaking download crossing 10 million users. PhonePe also hit the 50 million badge on the google pay store. PhonePe had a bump on the road in January 2017 as the ICICI bank and Airtel blocked it for violation of NPCI regulations which was resolved in February 2017.

The features that PhonePe offers are:

  • Zero banking charge
  • UPI transactions
  • Bill payments, DTH recharge, ticket bookings.
  • Transactions limit is 10,000 for wallet and 1 Lakh for UPI

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With the development of unified payments Interface the battle over digital payments has been dominated by 3 major players which are Google Pay, PhonePe and Paytm. The National Payments Corporation of India (NPCI), the overall transactions recorded month December of 2019 alone 1.3 billion transactions were made worth 2 trillion. According to Economic Times the number of payments recorded on UPI by Paytm was 157 million and 340 million for PhonePe.

Mode Volume Value Share
UPI 822.3 1.4 lakh crore 100%
Google Pay 300.6 59,200 Cr 36%
PhonePe 133 20,500 Cr 16%
Paytm 296.3 50,500 Cr 36%

The 10 parameters of comparison:

1. Interface:

The most important and primary feature of any app. Both the apps have a different interface. The points below explain the different points of interface.

  • Clarity - When it comes to clarity PhonePe has clearer home page than compared to home page. PhonePe icons are much more spaciously placed, while Paytm icons are closer.
  • Fonts - the fonts used on PhonePe are slight bigger than the ones on Paytm. This can be because Paytm offers more services than PhonePe as like the Paytm Mall and difficult to show icons in big fonts.
  • Ease of access - In Paytm there are very few icons appears on home page and you have to click on more in order to get other options which makes Phone pay easier to access. But having said that Paytm has different types of services like vouchers, Paytm Mall shopping, Education, games, travel entertainment and food.
An example of the difference between the interface on both apps.
An example of the difference between the interface on both apps.

2. UPI payment Facility

PhonePe allows you make easy UPI payments to your contacts and other account holders with the help of IFSC code, this way you can also transfer money from money from one bank account to another.  On the home page you can find the option of money transfer through which you can later connect it to a contact number to choose your beneficiary. With a single click you can reach the payment page by clicking on send to complete the payment.

Paytm also has the same process but with a few added on steps to make while making a UPI payment. The best thing for UPI payment is PhonePe you are easily see is that you can easily see your contacts using the app.

3. Merchant payment

PhonePe gives you the easier interface for merchant payment than in Paytm. PhonePe has QR icon on the top of the home page, while the Paytm it is at the bottom. However, there is an extra option to pay the merchant with the QR code in Paytm. For this, you have to click on pay icon at the top of the home page. Phonepe saves the merchant name and account number on the home page just like the beneficiary name and account number saves your time the next time you want to pay to the merchant.

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4. Recharge

When it comes to recharge both the apps give recharge facility of mobile or DTH or other utilities. PhonePe however completes this process quicker than Paytm. But paytm takes more time to reach the required page and visit more pages to recharge through paytm like payment options page and offer page. In paytm it also directs you to page where you recharge other types of facilities like DTH, electricity, water, apartments, etc.

5. Bill payment

Recharge facilities like the bill payment is easier in the phonepe as only through a single click you can reach the payment page. While Paytm takes a few more steps more than Phonepe same as in the recharge section.Paytm there is a 5% convenience fee for transferring money from paytm wallet to the bank account which is free. Phonepe has only recently started wallet service.

Digital Wallet UPI feature Mobile Wallet Bill payment Debit/credit
Paytm yes yes yes yes
PhonePe yes yes yes yes
BHIM yes no no no
Freecharge yes yes yes yes
Google yes no no no

6. Cashback

Both of the apps give cashback benefits on your Payments. Who gives more cashback depends on the circumstances. The first transaction on both the apps may give you higher benefit. Like, if you are making first time transaction, may be you get the higher benefit. Phone pay provides the cashback benefit on maximum transaction without activating the offer while in paytm you have to activate the offer to get the cashback.

7. Charges

Both Paytm and phonepe levy the charges for fund transfer from your wallet to your account. But neither paytm nor phonepe is giving any kind of relief for fund transfer charges. If they transfer more than 50,000 to their bank account, they have to pay some charge. Both are similar when it comes to taking a certain percentage of charges.

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8. Useful Services (Travel Tickets, Movie, Train status)

They both provide financial services but paytm offers more services for than phonepe, like the movie tickets. Movie tickets can be easily booked on paytm. And when it comes to booking and checking train status phonepe is easier than paytm because it can be done with a single click to reach all the types of travel booking section. Where as in phonepe you have to tap on specific icon after which it will give you the option of booking through the recognized booking apps in switch service.

9. Account Management

In Account Management feature Phonepe is better than Paytm. Within one or two clicks, you reach the required option. Generally, Account Management feature has the Autopay of bills, Reminder of bill payment. When it comes to autopay and reminder, Phonepe has a better interface for these services. Just tap on My Money tab and you reach on Autopay and Reminders icons. From here you can set the autopay service of your utility bills and set the reminders for next time. On the given due date Phonepe will remind you through the notification. Then you can pay the bill with lesser effort.

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10. Customer Care

The customer care is more efficient of Phonepe than of Paytm. Phonepe’s Help section is very broad so if someone has any query, search in this section, read properly and you can solve it. Your maximum queries may be resolved by the Help section. You can also contact them and get a reply within 24 hours. With Paytm’s 24X7 help named customer care service is also helpful to resolve the issue. This section is under the 3 parallel lines at top left corner. From here you can check your queries and raise a new problem/query.

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About PV Vyshnavi

  • Bangalore
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