PhonePe and Google Pay Dominate UPI Market in May; Growth Slows as Ecosystem Nears Saturation
PhonePe and Google Pay Dominate UPI Market in May; Growth Slows as Ecosystem Nears Saturation
PhonePe leads with 50% market share in value; NPCI data reveals UPI processed over ₹25 lakh crore in May
In May 2025, PhonePe and Google Pay continued to lead India’s Unified Payments Interface (UPI) landscape, capturing a combined market share of over 80% in both transaction volume and value, according to data released by the National Payments Corporation of India (NPCI).
PhonePe, which is currently preparing for an IPO on the Indian stock exchanges, maintained its top position by facilitating ₹12.56 lakh crore worth of transactions across 8.7 billion transactions. This accounts for 50% of the total UPI transaction value and 47% of the volume, underlining its dominance in the digital payments ecosystem.
Close behind was Google Pay, which processed 6.7 billion transactions worth ₹8.85 lakh crore, claiming 37% of the total UPI transaction volume and 35% of the value in May.
Paytm, operated by One97 Communications, ranked third with 1.27 billion transactions amounting to ₹1.38 lakh crore. This equated to 7% of the transaction volume and 5.55% of the overall value. Meanwhile, Navi, promoted by Flipkart co-founder Sachin Bansal, and Flipkart’s super.money secured the fourth and fifth positions among UPI platforms, respectively.
According to a recent report, PhonePe generates 95% of its revenue from digital payments, making UPI a central pillar of its operations. Similarly, merchant-focused fintech companies like Pine Labs and Razorpay, both of which are preparing for public listings (with Razorpay eyeing 2026), remain heavily reliant on UPI volumes.
The total number of UPI transactions in May stood at 18.68 billion, reflecting a 4.4% increase over April, which had seen a minor dip. The total transaction value in May reached ₹25.14 lakh crore, up from ₹23.95 lakh crore in April.
While UPI continues its upward trajectory since its launch in 2016, experts note that growth has begun to decelerate as the market matures and nears saturation, particularly in urban areas.
Adding to challenges in the ecosystem, the Ministry of Finance recently reaffirmed that there are no plans to reintroduce the merchant discount rate (MDR) for UPI transactions. This decision impacts monetization strategies for listed fintech firms and startups, many of whom had hoped for regulatory support in generating revenue from merchant transactions.
Despite these hurdles, the UPI ecosystem remains a cornerstone of India’s digital payments infrastructure, with top players continuing to innovate and expand their footprints across sectors.
