GPay, PhonePe gain on Paytm’s travails

Mumbai: GPay and PhonePe are rapidly gaining customers from Paytm, the fintech pioneer struggling to navigate central bank restrictions and the potential shutdown of a key payments affiliate. The value of Paytm payments made on India’s state-backed transactions system fell 14 per cent to Rs.1.65 lakh crore ($19.9 bn) from Jan., the national payments council of India (NPCI) said on its website on Wednesday.

Google’s GPay and Walmart-owned PhonePe, which both process far more payments than Paytm, each had an increase in their payments value. Paytm’s decline suggests consumers are moving usage to alternative services even before any disruption to its systems. The new curbs affecting Paytm are kicking in on March 15, and even after that the company expectsits digital payments



services to keep running as before.

Yet the firm’s stock has slumped since the regulator unveiled its action in late January 31, on concern the restrictions will crimp the fintech pioneer’s prospects. The value of transactions processed by PhonePe rose nearly 7 per cent, while GPay witnessed an almost 6 per cent rise, NPCI data showed. Also when measured by payments volumes, 

Paytmdeclined while PhonePe and GPay advanced. Companies don’t makeany money on transactions on the state-backed system, called unified payments interface (UPI), but it provides them with a massive catchment of hundreds of millions of consumers to whom they can cross-sell services such as insurance and mutual funds.