The invention of ATM revolutionized the way we exchange and handle money. And the advent of digital wallets has put that revolution into oblivion. Why? We now carry out 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 India. UPI is racing towards becoming the leading payment mode in India today.
E-wallets such as Paytm and PhonePe were saviors for Indians after demonetization took place in November 2016. Imagining transactions without these two mobile wallets is not possible anymore. In fact, the digital payments space has become too crowded with the emergence of several Indian fintech ventures; digital platforms are competing against each other to provide customers with the smoothest transaction experience. Which is better PhonePe or Paytm? Which is more secure Paytm or PhonePe? This StartupTalky post compares Paytm and PhonePe using 10 parameters to solve the debate.
Paytm was launched by Vijay Shekhar Sharma in 2010. One97 Communication Ltd is Paytm's parent company. Paytm is counted amongst the best payment apps in India and offers a mobile wallet for carrying out transactions. It also allows bill payment for mobile services, DTH services, and much more. Paytm has established itself as a sophisticated mobile payment application and has catered to more than 250 million users in the last 8 years. It has the capacity of handling more than 5000 transactions per second.
Some salient features of Paytm are:
- Zero banking charges.
- Transaction limit of INR 1 lakh for wallet along with UPI bank transfer.
- RBI-approved safe and secure digital wallet.
- Payments bank, ticket booking (for trains, buses, flights and movies), and UPI payments.
PhonePe is also counted amongst the best payment apps in India. It was founded by Sameer Nigam and Rahum Chari, former Flipkart employees, in 2015. In 2016, PhonePe became the first Android app to provide UPI-based user services. Within just 3 months of its launch, the PhonePe app hit 10 million downloads. PhonePe also reached the 50 million badge on the Google play store pretty quickly. However, it wasn't a smooth sail for this digital payments provider. In January 2017, ICICI bank and Airtel blocked PhonePe for the violation of NPCI regulations. The matter was resolved in February 2017.
Some salient features of PhonePe are:
- Zero banking charges.
- UPI transactions.
- Bill payments, DTH recharge, and ticket bookings.
- Transaction limit is INR 10,000 for wallet and INR 1 lakh for UPI.
With the development of Unified Payments Interface, the battle over digital payments has narrowed down to 3 major players: Google Pay, PhonePe, and Paytm. According to the National Payments Corporation of India (NPCI), the number of transactions recorded in December 2019 were 1.3 billion and were worth INR 2 trillion. According to the Economic Times, the number of payments recorded on UPI by Paytm were 157 million and 340 million for PhonePe.
|UPI||822.3||INR 1.4 lakh crores||100%|
|Google Pay||300.6||INR 59,200 crores||36%|
|PhonePe||133||INR 20,500 crores||16%|
|Paytm||296.3||INR 50,500 crores||36%|
PhonePe and Paytm compared
The user interface (UI) is the most important feature of any app. People are quick to form perceptions just by the user interface. Paytm and PhonePe differ when one considers the user interface.
- Clarity - When it comes to clarity, PhonePe has an edge over Paytm. PhonePe icons are spaciously placed while Paytm icons are concentrated.
- Fonts - The fonts used on PhonePe's app are slightly bigger than the ones used by Paytm. A possible reason could be that Paytm offers more services than PhonePe (e.g. Paytm Mall); hence, showing the icons in bigger fonts could hinder visibility.
- Ease of Access - Very few icons appear on Paytm's home page (in its mobile app) and you have to click further to see other options. This is not the case with PhonePe. Every feature can be accessed from a single page in PhonePe's app. Again, Paytm has different types of services in the form of vouchers, Paytm Mall, education, games, travel entertainment, and food. Showing all of them on one page is not an easy task.
2. UPI Payments Facility
PhonePe lets you make UPI payments to your contacts and other account holders with the help of IFSC code. This approach enables you to transfer money from one bank account to another as well. On PhonePe app's home page, you find the option of money transfer which can then be used to choose a beneficiary. With a single click, you can reach the payments page by clicking on 'send to complete the payment'.
Paytm has a similar process but with some more steps. People find it easier to make UPI payments via PhonePe when compared to Paytm.
3. Merchant Payment
PhonePe gives you a comparatively better interface for merchant payment than Paytm. PhonePe has the QR icon on the top of the home page, whereas the QR icon is at the bottom in Paytm's app. PhonePe saves the merchant name and account number on the home page, similar to how you would save a beneficiary name and account number. Therefore, you don't need to add any details the next time you pay the same merchant.
When it comes to recharge facilities, both apps support recharge of mobile, DTH services, and other utilities. PhonePe, however, completes this process quicker than Paytm. In Paytm, you need to navigate through multiple pages to perform the recharge. In PhonePe, much navigation isn't needed.
5. Bill Payment
Recharge facilities such as bill payment are easier in PhonePe since it takes a single click to reach the payments page. Paytm requires you to follow some more steps to land on the payments section.
|Digital Wallet||UPI feature||Mobile Wallet||Bill payment||Debit/credit|
Which app gives more cashback Paytm or PhonePe? Both digital payment apps give cashback benefits on your payments. As to which one gives more cashback depends on the circumstance. Your first transaction on either app is likely to give you the highest reward. PhonePe provides cashback on transactions without having to activate some offer. When using Paytm, you need to activate an offer to get the cashback.
Both Paytm and PhonePe levy charges for fund transfer from your digital wallet to your bank account. Neither Paytm nor PhonePe gives any kind of relief when it comes to fund transfer charges. The fee is nearly the same for both Paytm and PhonePe.
8. Useful Services (Travel Tickets, Movie, Train Status, etc.)
Paytm offers more services than PhonePe. Just look at the enormity of Paytm Mall! And then there's the seamless experience of availing services such as movie bookings, etc. Paytm beats PhonePe in some services, whereas PhonePe leads in the others. Movie tickets can be easily booked on Paytm. But booking train tickets and checking train status is easier on PhonePe.
9. Account Management
The account management feature of PhonePe is better than Paytm's. You can handle management-related options in just a couple of clicks in PhonePe. Generally, Account Management comprises auto-payment of bills and bill payment reminders. And PhonePe has a better interface for these two options. Just tap on 'My Money' tab and to reach the auto-pay and reminders icons. You can set the auto-pay service for your utility bills and reminders from this space.
10. Customer Care
Both Paytm and PhonePe offer dedicated customer service helplines. PhonePe's 'help section' is extensive and covers nearly every imaginable query. Most of your doubts can be resolved by the help section. You can also contact PhonePe representatives and expect a reply within 24 hours. Paytm does not lag behind this aspect. Its 24X7 help desk has improved significantly over time and is at par with some of the best help desks in the world.
What is PhonePe?
PhonePe is a digital wallet platform and online payment company headquartered in Bangalore, India.
How PhonePe app works?
PhonePe works on the Unified Payment Interface (UPI) system. All you need is to enter your bank account details and create a UPI ID. You don't need to recharge the wallet because the money will be directly debited from your bank account at the click of a button in a secure manner.
Is PhonePe app safe or which is more secure Paytm or PhonePe?
PhonePe is constantly working round the clock on making transactions highly secure and safe. It uses a mix of cutting-edge technology and strong risk & fraud processes to keep fraudsters at bay.