Top UPI merchants — Zerodha, CRED & BharatPe are 3 big surprises
UPI is going strong at 1.8bn transactions a month. It is expected to touch 2bn in October. We have roughly 120mn users on UPI network so each user is doing approximately 15 transaction transferring approximately Rs.25,000 every month. Well, this may not look like a common user behavior but remember a big chunk of IMPS (net banking) has moved to UPI for small businesses. Business payments below Rs.1 lakh are now routed through UPI mostly because apps like Paytm, Google Pay & PhonePe have made it ridiculously easy to send money to anyone using their phone number or UPI ID or bank account/IFSC.
As per my analysis (please don’t ask for data source, feel free to disregard this data), some 3mn business users do roughly 20 transactions a month for Rs.25,000 each. That itself is Rs.1.5 lakh crore.
Remaining Rs.1.5 lakh crore is done by 117mn consumers like you & me. It is still a big number but let’s accept that we can’t even imagine the way UPI payments are being used today in India.
Key UPI growth statistics (September 2020):
- 1.8 billion transactions vs 955mn in Sep 2019–2x growth
- 1.3bn P2P txns (person to person) and 500mn P2M txns(person to merchant)
- INR 3 lakh crores transacted (IMPS did INR 2.5 lakh crores in comparison)
- Over 5mn “active” merchants on UPI (inactive merchants > 10–12mn)
- 120mn active UPI users (overall transacting users in India are also the same broadly so there is almost 99% overlap here)
Expects some big bang numbers in Oct-Nov (sale & festival season)
Coming back to the main topic of this story, P2M (person to merchant) payments are witnessing a huge surge. It is becoming the most preferred contactless payment option offline.
I tweeted few days ago how overall P2M transactions in India have crossed 1bn a month — that included UPI, Wallet & Cards payments across offline (shops) & online (apps & websites).
I decided to go one step further and figure out which merchants are driving this surge in UPI P2M payments.
Before I talk about top merchants, it is important to understand the difference between Top UPI App numbers (Paytm, PhonePe, Google Pay) and merchant acquirer numbers. Below is a visual representation on who is classified as a merchant acquirer on the UPI network and what is categorized as a P2M transaction.
While consumers still use three main UPI Apps (Paytm, PhonePe, Google Pay), but they pay at several merchants offline & online as shown above. Here are the top merchants who accept UPI. In addition to the ones listed below, other big merchants are Dream 11, Swiggy, Zomato, Jio, MPL, Razorpay, Flipkart.
How to read the above graph:
- The y axis shows the amount transacted on these merchants.
- PhonePe includes both QR payments & all transactions in their app (recharge, bill pay etc).
- CRED does approx 3000cr+ on UPI alone. Please remember they allow payment through debit card & net banking too so their overall GTV will be higher.
- Paytm is no.4 on UPI but they are the largest merchant in India overall as wallet is still one of the biggest P2M payment mode as highlighted in my tweet above. Paytm is the only payments app where one can pay using UPI, Wallet, Cards, Net Banking & their own proprietary payment modes like Paytm Postpaid. Paytm is also the largest merchant acquirer in India through their multi product offerings like Wallet, QR, POS, SDK, PG etc.
- BharatPe is probably the largest UPI QR merchant acquirer in India now as 100% of their value is from UPI QR payments. 100% of their volume is through UPI P2M which is a small ticket vs P2P so their merchant base is driving some huge numbers lately.
- Zerodha is now attracting a lot of new customers so they are likely to be a big merchant going forward.
- Amazon is making big moves on UPI — they are not only big on the merchant side, they are also becoming a 4th biggest UPI money transfer (P2P) service in India.
Big question: Why is Google Pay not in top merchants (considering they are the largest UPI App in India)
Answer: Google is the biggest TPA (Third party App) on UPI with over 40%+ share of all transactions in India but somehow they don’t figure high on merchant side. This is because Gpay doesn’t actively acquires QR merchants + business products on Gpay app (recharge, DTH etc) aren’t very popular. Gpay is the preferred P2P app for India. Also you would have noticed many merchants display Gpay linked mobile number outside their shop — that gets counted in P2P. Also, Gpay for business App allows merchants to become a P2P2M merchant which again doesn’t get counted on the merchant side. Gpay has literally created few million merchants without employing a massive feet on street model.
A big cobra lurking around the corner: Whatsapp Pay
Everyone assumes that Whatsapp Pay will be another big (sorry huge) player in the UPI race and they will either eat the share of existing players or expand the market. While all that is expected to happen, I believe they are fundamentally going to alter how P2P & P2M is seen today. This story on “Top UPI merchants” will feel irrelevant in few years. Whatsapp will be the biggest merchant acquirer without really making an effort. Lines between P2P and P2M will get blurred and QR may make way for “Pay to a whatsapp mobile number” at your neighborhood store.
Disclaimer: most of this data is derived through my analysis from interactions with industry stakeholders hence there is no single source of data which I can quote here. Please do your own research before further using this data for your own analysis as I don’t claim 100% accuracy.
I will be happy to hear your feedback on this. Feel free to comment here or tag me on twitter @deepakabbot or mail me at dabbot@gmail.com
