India-based Paytm’s share of the country’s Unified Payments Interface (UPI) continues to slip.
The FinTech made up 8.1% of total UPI transactions last month, down from 13% in January, the National Payments Corporation of India said in data released Thursday (June 6).
Paytm accounted for 1.1 billion customer-initiated transactions on the network. That put the company in third place between the Walmart-backed PhonePe (6.8 billion) and Google Pay (5.2 billion), whose share of the market continues to climb.
The company has been struggling since January, when India’s banking regulator suspended business at Paytm Payments Bank — which had processed much of Paytm’s payments — after an audit uncovered “persistent noncompliances and continued material supervisory concerns.”
The move by the Reserve Bank of India (RBI) followed two years of warnings about the questionable relationship between Paytm and its banking arm.
Later reports said the RBI came to this decision after the audit found money and data traffic flow between Paytm Payments Bank and its parent company that sparked accounting and supervisory problems. The regulator also warned of possible conflicts of interest, with the same executives making decisions at both Paytm and Paytm Payments Bank.
The news comes weeks after reports that Indian conglomerate Adani was in talks to enter the eCommerce and payments space.
The company is considering applying for a license to take part in the UPI network, the Financial Times reported last week.
Adani is also in discussions with banks to finalize plans for a co-branded credit card and negotiating to offer online shopping via India’s state-supported eCommerce platform, the Open Network for Digital Commerce, that report said.
“There are just three business conglomerates running this country — the Tatas, the Ambanis and the Adanis,” Jayanth Kolla, a Bengaluru-based technology analyst, told the British newspaper. “Adani is the one of the three groups which does not have significant consumer-facing businesses.”
Companies like Paytm, Adani, Google and PhonePe are all vying for consumer attention in a country that has been on a “digital payments journey” for the last 15 years, as PYMNTS wrote in late 2023.
PYMNTS Intelligence research has shown that digital wallets are now the preferred payment method for more than half of retail purchases in India, with 80% of digital wallet users opting for UPI.