The UPI War- Which App is leading the Cashless Payments Market in India?

The UPI War- Which App is leading the Cashless Payments Market in India?

There is a high chance that you don’t remember the last time you used ‘cash’ for a transaction at a Kirana store. The world is changing and it is becoming cashless, not a new thing but more like the new normal.

The shift from cash to cashless is so welcomed all over the world that it has become the new normal. Tech in transactions is the most in-demand technology and has proved to be really penetrative in every society.

The most famous technology is the UPI. It stands for Unified Payments Interface. It is the most favourite bridge that enables transactions all over India. We all know this and we see just this aspect of the story. However, that is not all. Behind the scenes, a lot of fights happen for customers and numbers. UPI apps are almost always constantly at war. In this article, we talk about these apps and what is the issue that they deal with. But first, the basics.

What is UPI?
Benefits of UPI
Total Transactions of UPI Apps in India
Factors of UPI Payments
A Detailed Look at the UPI App War
Unique and Differentiating Factors of UPI Apps
UPI Guidelines and Regulations

What is UPI?

UPI or the Unified Payments Interface is the most famous bridge of transactions in India. It is fast and secure which makes it the perfect alternative for cash. Handling cash is hard, handing a UPI is not hard at all.

Immense growth was led by UPI last year, which recorded more than INR 73 Lakh Crores in 2021. Moreover, a year-on-year rise of over 110% as opposed to INR 33.87 Lakh Crores transaction in 2020.

UPI is a system that has the ability to attach multiple bank accounts with a smartphone application. That application can be later used to transact with the bank that the user uses. This makes it easy to go cashless when your bank account is linked to the UPI app in your pocket. It's like taking the bank in your pocket.

Benefits of UPI

  • You can send money almost immediately through any smart device and even a basic buttoned device.
  • UPI is available at any hour and any day of the year.
  • As the name suggests, UPI is a unified payment method that enables a user to add more than one bank account to the application.
  • 2FA is more than easy in this process. 2 FA stands for two-factor authentication which is easily managed with a UPI pin along with the inbuilt app pin.
  • UPI is easy because it saves you the time of writing details like Card number, IFSC code and all the bank page clutter.

Total Transactions of UPI Apps in India

UPI is the future of payments, or should we say the smart present of payments. The numbers point in this direction as well. We see that just in the first month of this year, UPI transactions touched the cap of 461 crores. Those crores transactions totalled to be worth about 8.31 Lakh Cr.

The topmost player surprisingly was not Google Pay, In terms of market share PhonePe carried out 21,403 Crore transactions. Those mentioned transactions were worth INR 4.05 Lakh crore in the first month of the year.

The new entrant in the payments market, WhatsApp Pay saw the value and number of transactions grow to great magnitudes. The overall share of the company however is as low as 0.03 percent which entails about 13.4 lakh transactions in the first month. Those transactions were reported to be around 205 Crore in Indian Rupees.

In the month of January, the UPI transactions were recorded to hit the number 461 crore. Those transactions in the month touched the magnitude of 8.3 lakh crore in Indian rupees, equivalent to 111 billion dollars.

This number was not usual in any sense and was the highest recorded number in the history of UPI transactions. Even after this number is the highest in the magnitude of UPI transactions, it grew only about 1 percent month on month. This is in no doubt a jump and halt situation.

Noticing the surge in transactions and magnitude in the UPI sector, it was also noted that app performance had not grown that much. App wise, the growth was not new, it was the previous pace that continued and no jump was noticed in the app sector.

Apps performance recorded a single digit of growth in this month on month. Even in this segment, PhonePe was the winner that carried 4.05 lakh crore transactions. Google Pay, which most people were anticipating, did not come to the first resort. It was the second runner up in the race of UPI transactions. That maintained to get some transaction value that was worth almost three lakh crores.

The third number, in terms of transactions and magnitudes, was won by the Indian player that is also now a publicly listed company. Yes, you guessed it right, it is Paytm. Paytm saw a transactional rate of 85 thousand crores which was a fall from before. Amazon pay got transactions that were worth about 67 hundred crores. WhatsApp, the new entrant in the payments market touched the 205 crores of transactions with its messaging app which is now a UPI payments app too.

Among all these numbers, one thing is common, that thing is UPI. It is the transaction that everyone is looking at and it is also the point of conflict of many multinationals.

UPI war is on with all the players in the market. The goal is to get maximum density in markets and to get a viable customer experience that can increase loyalty. Before we read more about the ongoing UPI war let us read some important words in the UPI market. Basically how the UPI world works.

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Factors of UPI Payments

There are many technical terms that can confuse a noob when we talk about technology. The UPI world is also not an exception. Let us talk about a few things that the UPI entails before we read more about the UPI war.


VPA or virtual payment address is the virtual address of someone. As the name suggests, it is the address to which payment in a transaction can be directed. To begin a transaction, one has to share their virtual address to which the payee can direct the payment.

The payer has to confirm the VPA by entering the MPIN, or mobile pin, to be sure that it is an authentic translation and is done by the owner of the bank account. Once checked, the transaction is completed and a change in balance is reflected, without any delay.

QR code

QR code is a better alternative for VPA IDs, these are codes that can be scanned via a mobile device. Stores have these types of transaction mechanisms that help in the easy collection of payments from buyers.

They can be scanned from the UPI app itself and transactions can happen easily. This is easy and faster than sharing VPA IDs and most smart stores have them as a payment aid.

QR Code Scanner
QR Code Scanner

Several Bank Accounts can be added using the UPI app and Several VPI Ids can be maintained. A maximum of 20 transactions is allowed in 24 hours. All transactions take place on a real-time basis.

The Mobile Number

Most people in India are not tech-savvy and this is a hindrance in payments via UPI. Even if someone sets up a VPA and UPI Id on a shopkeeper’s device, he won’t know it and would not remember it.

UPI apps save the day with one more feature. Mobile numbers can also direct payments to the right address. This feature was enabled recently and has massive use cases.

Every mobile number now is connected to the bank account of the holder and can serve as a UPI or VPA ID. They are known as linked MMID and can direct payments to the right bank account.

Bank Credentials

Another factor in payments of UPI is the bank credentials themselves. You can manually enter the saving account number and/or the IFSC code to the UPI app and the app can direct payments to that specific account. This is however not the best alternative to transactions but is popular in India.


New smartphones nowadays come with a new technology called NFC. NFC is an audio technology that is contactless and can connect two devices. This connection can also help in UPI transactions and is authenticated by both ends. According to RBI guidelines, one can interlink all their existing KYC compiled e-wallet accounts. But, only a few apps provide this service.

Market Share of UPI Apps and the Ongoing UPI War

A Detailed Look at the UPI App War

The UPI apps we are talking about, have their own territory. Market share refers to that territory in this context.


Last year the UPI app with the most wins was PhonePe. This year the war continues. PhonePe won on all the key metrics that there is to track payments. Be it the value of transactions, registered users and all the merchants' average.

While PhonePe’s count of transactions remained the same, the volume of transactions rose to 48.7 percent. The startup has been the leader in the market with over 46 percent market share in the transactions volume processed last year. This metric proves the dominance that the UPI startup has gathered.

PhonePe’s share in transactions counts remained the same but the volumes transcended a big jump and it rose to about 48 percent. The company also claimed that the ‘registered users’ have crossed the 350 Million mark. They also mentioned that they were witnessing a 28 percent month on month growth from January to December 2021.

PhonePe is the first payment platform in India. Based out of Bangalore, this UPI payments app became the heartthrob of payers. The company collaborated with Yes bank to get into the UPI space and captured about 37 percent of the new market in India. Later, the company was acquired by e-commerce giant Flipkart. It is soon to be added as a valid payment option in Walmart India’s “B2B Cash & Carry Stores”.

They had the first movers advantage in many aspects. Just like the google pay (Tez earlier) app, the PhonePe app has a lot of features that make them stand out. With the money transfer limit using UPI set to ₹1 lakh, one can pay credit card bills too. An outstanding UI is a cherry on top.

Google Pay

Next in the line of market shareholders is the most household name of Google pay. They didn’t witness significant growth. The market share for google pay dropped from 37.5 per cent to 34.4 percent. According to an NPCI guideline, all third party UPI apps have to add a cap to the value of their transactions at 30 percent by December 2023. This can be good news for this fall in the market share of the US fintech giant.

With great goodwill at the back, Google really stands on a pedestal. The google pay UPI app is by far the most famous UPI payments app in India. Google has always remained a top innovator in every part. Any of the Google services can be relied upon. The name Google itself stands for efficiency and simplicity. The Google Play app has also made it easy for app users to use proximity features. They have NFC enabled in the app.

The payments app from google has all the features that it takes to make it the best UPI app out there. With online trade being a fast option for most people, google play also includes more than 2000 merchants partners in India alone. In India, Google pay is the second-largest UPI payments app with a market share of 35 per cent. It entails figures like 320 Million transactions in terms of volume and 61000 crores in terms of value being the guns on its trajectory.

The app really features loaded and has every feature of a top-notch character. Carrying the ‘Simplicity’ thing that google has managed to carry on all its services and apps, the UPI app has managed to get the second most UPI payments in the country.

PhonePe and Google Pay were the topmost choices of UPI payments in the last year. We will discuss the rest later, let’s focus on the war of these two first.


Paytm is another famous name in the UPI segment. It has an inbuilt feature of wallet which can be used without KYC and bank account, this is one of the most unique features that the app has. It is also a differentiator. The war of UPI apps has led Paytm to get a share of almost 6% in the UPI segment. This is rather small but the app has a lot of potentials. The primary rivals are Google Pay and the leader PhonePe.

Paytm was the first digital payment service provider that had its hands on Indian territory. The homegrown brand is the largest digital wallet service provider in the country. The app is known to have dominated the cashless payments market. The company also claims that they have more downloads across Android and IOS than most UPI payments apps. The initial problems that the company faced were the UI and the acceptance of digital payments in India.

After updates and updates with learning's and learnings, the Paytm app has improved much and now comes with an excellent UI. The app first lost in the war of UI and user experience but the overall performance has been quite impressive. It is the most famous homegrown UPI app in India. Founded by Vijay Shekhar Sharma and being a homegrown company, the startup has a lot of leverage that adds to its revenue.

Paytm is one of the easiest to use UPI apps out there and not only that, the app offers a long list of features. There is a unique wallet feature, then there is a Paytm bank, then a mall on your phone, it is also now entering the investments category.

You can pay your credit card bills, do shopping of all sorts and buy now pay later options are available too. Thus, this small package of apps offers a decent amount of features and accessibility to money and transactions. That is one of the main reasons for its market share of 6%, which is decent in India.

Amazon Pay

The next rival or participant in the UPI war is Amazon Pay. The new entrant in the market with great tech support and seamless payment options, amazon pay is out there to win.

As of November 2020, it was reported that amazon pay was the fourth most used app in the UPI segments. The app wins over everyone in terms that it is a sidekick of payments in shopping. The brand of amazon gives it a good boost. It was reported that Amazon Pay got 37.15 million transactions in volume that added to over 3600 crores in total value. Which is a pretty good sum in the segment.

Not only a shopping aid but the amazon pay app also offers payments of groceries and small buys at a Kirana store. The shopping integration of Amazon is really a great kick start but the app is also growing out of that segment too. Amazon pay got 37.15 million transactions in volume with Rs 3,624.51 Cr in transaction value in this month.

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Unique and Differentiating Factors of UPI Apps

The ongoing war is nothing but a fight of features and like-ability. The app that has the most unique and helpful factor wins the game and takes the customers. All the top players in the market which we discussed above have their own set of features and uniqueness. Here we will try to uncover what lies behind the bush of differentiators.


PhonePe, the most used UPI app in terms of volume, is bound to have awesome features and traits. The startup has made its app look really different and simple. The app is capable of linking various accounts and e-wallets to itself.

You can link free charge, Jio money, and e-wallets like Airtel wallet to your PhonePe account. The app also allows people to pay credit card bills within the app which saves a lot of hassle.

The users of PhonePe can even buy gold with the new update. Cashback and rewards are the most common features of UPI apps in the market. PhonePe has that, without mentioning it. The app follows all the guidelines of UPI payments and thus, one can make a transaction of upto 1 lakh. The app also has the basic categories of regular payments like electricity, gas broadband, data card and the like.

Bill payments and recharges are very easy on PhonePe and there exists a separate icon for money transfer from bank accounts. You can check bank balances too and they are super attentive to negative feedback. Which makes it the all-rounder UPI payments app.

Google Pay

Google Pay is another famous app. The UPI app from Google runs on the same principle as of the parent company Google. The app is simple and works every time without any hassles. However the wallet option is not available, the app does work overtime to make it right for users. You just need a mobile number and a bank account to start your payments. It is easy and reliable.

You can chat with a person on google pay before and after any transactions. The User interface and the experience that it entails is also top-notch. Payment services are available across all the Google services and they can also be used to 3rd party apps. There exist extensions like Zomato, Swiggy, Groww and etc. within the application itself. It is the first to use NFC technology. DTH, broadband, landline, mobile recharges are also reminded to the user. The app is secure and has a safety shield feature too and users can also enable biometrics.


The app comes with an excellent user interface now and is completely made in India. Which makes it a famous application among Indians. The app has one of the most differentiating features of a wallet that helps it find a good product-market fit in the UPI segment. Many people who do not operate a bank account can go with this feature of e-Wallet. Paytm Payment Bank is linked with Rupay Virtual Debit Card.

Due to all the features and an excellent UI, the app works in most locations. From a small Kirana store to big malls, Paytm is accepted. You can even invest your money directly from the app itself. Paytm services range from bank to mall to mutual funds etcetera.

Amazon Pay

Amazon Pay is also a famous app because of its parent company, Amazon. The app first originated as a payments app for nearby UPI payments. Now the app has grown into a full-feature app on its own. It is a great aid in shopping for people who love to shop.

Apart from that the app also makes it possible to use it as a UPI payments app. This was the unique feature with Amazon pay but it is not that famous like Google Pay and others.

The reason is that many people don’t know about it, Amazon customers just use Amazon to buy something and forget about their account. Once this barrier is lifted, the Amazon pay app can be a big disrupter in the online payments market.

UPI Guidelines and Regulations

When the online market in the payments sector is booming, it becomes important that the market is regulated. NCPI has come forward to make some guidelines for UPI payments. Here we will discuss some of the most notable ones. These are the guidelines for TPAP, or third party app providers.

NPCI’s guideline had asked all the third-party app providers (TPAP) to cap their transaction value at 30% by December 2023. This means that UPI payment apps like PhonePe and Google Pay now need to rescue their market share. As per NPCI, the upper limit for UPI is Rs. 1.00 lacs.

The Third-party app provider guidelines for TPAP guidelines are also aimed to prevent oligopoly and to promote competition. Competitions will be healthy for the overall market and it has the ability to make the market a little better than before for everyone. These guidelines were also the reason why WhatsApp has a very small UPI share in the whole market. WhatsApps share is equal to 0.08 percent.

Adding to the guidelines above, The NPCI has also disallowed WhatsApp from leveraging its payment platform. They have ordered a cap of 50 crores. This means that Whatsapp payments will not go above the magnitude of 500 million dollars or 50 crores. It is to be noted that WhatsApp had around 487 million registered users in India last year. In 2021, it had 390 million active users growing 16% year on year in India alone.

It was recently seen that the messaging app WhatsApp is entering the payments market which makes people suspicious. WhatsApp was also made to put a cap on their payments feature to prevent monopoly over the market. Their users were limited to 20 million. But now the revised relief says that the company can double down the users of the payment, NCPI said.

Now the cap is reported to be 40 million and WhatsApp has done really well in the past financial year. In January, last month, WhatsApp recorded a total of 23.4 Lakh transactions. That was worth INR 205 Cr. It also entailed a 9% month-on-month growth (highest among the top four, mentioned in the article).

RBI has mentioned that about 50% of the transactions through UPI were below INR 200, thus, a framework to enable small value digital payments in offline mode has been announced. Users will now be able to make small transactions (within 200 rupees) offline (without the use of the internet). We will now be able to channel transactions without any instruments such as cards, wallets and mobile devices in any UPI app.

100% of post office banks will come under the core banking umbrella to boost financial inclusion. The move is aimed at giving access to post office bank accounts through net banking, mobile banking, ATMs, and also provide online transfer of funds between post office accounts and bank accounts, During the Budget 2022 speech, Finance minister Nirmala Sitharaman said.
To boost the adoption of digital banking services further and to mark 75 years of India’s independence, 75 digital banking units in districts will be set up by scheduled commercial banks, Finance minister Nirmala Sitharaman said.
“This will be helpful, especially for farmers and senior citizens in rural areas, enabling interoperability and financial inclusion,” she mentioned in her Budget speech.

All the guidelines point in one direction, and that direction is the direction of a cashless future. We are all moving to a cashless world where paper money will be a thing of the past. This was not easy before but looking at the current trends and shifts in technology, it is the near future. Exciting as it gets, the UPI market in India is set for more tides and currents.

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As per a report by ACI Worldwide, India retained the top spot in terms of digital transactions worldwide. India saw payments of 25.5 billion on a real-time basis. It is the highest number, followed by China.

No doubt, that the UPI market is set for growth in India and anyone capitalising on this will make real cash. This is the reason UPI payments companies are fighting for this and thus the UPI war.

Apps like PhonePe, Google Pay, Paytm and amazon pay have been fighting for market dominance and the market is evenly distributed in most parts of India. Besides growing in India, the Unified payments interface is all ready to enter overseas as well, reports say. UPI will be prevalent in countries such as the USA, the UK, Japan, China, Singapore, etc.


Which are some of the Indian UPI apps?

Phonepe, Paytm, and BHIM are some of the UPI apps based in India.

Are UPI apps safe?

Yes, UPI apps are completely safe as it is regulated by the Reserve Bank of India & NPCI.

Which payment app is the best?

Google Pay, Paytm, Phonepe and Apple Pay are some of the best payment apps.

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