Ever since demonetisation in India, e-commerce and digital payment services have witnessed a record rise in the country. More recently, in the on-going global health crisis, currency notes changing hands and travelling across the country have also been identified as a potential risk that can facilitate the transmission. Thereby, the COVID-19 pandemic has been yet another push encouraging businesses and individuals to go cashless.

The fast-growing market of digital transaction services has been crowded with many indigenous as well as international players. Google Pay and Paytm have consistently been two of the leading players in the Indian online payment space giving the other a fierce competition. In this article, we also try to examine the current battle of Google Pay vs Paytm for digital transactions and active users.

Google Pay vs Paytm

As per a Bernstein report in June, Google Pay was leading the payments market in the country with 75 million transacting users in May 2020. Paytm, on the other hand, was reported to have only 30 million transacting users in the same month.

Additionally, as per a National Payments Corporation of India (NPCI) report, Paytm has recorded 120 million UPI transactions while Google Pay has 540 million UPI transactions.

But, Paytm has countered that UPI transactions are only a minor percentage of all digital payments taking place in India. It has claimed that the company’s overall user base is probably larger than the collective UPI base of the rest of the players.

Challenges facing the Leading Payment Apps

Google Pay is to be registering increasing UPI is also worth noting the operational validity of Google’s payment service as a third-party app is being looked into in the Delhi High Court. Furthermore, the emerging service provider, WhatsApp Pay is expected to give both the companies a tough challenge in the coming years.

Paytm had long held the ground as the most popular transaction service provider for online payments. But, with an increasing number of players in the space, Paytm is facing a significant challenge in retaining its user base.

The firm had reported a decline of approximately 5 million monthly active users from 2018 to 2019. It registered 40 million monthly active users in December 2019 against the 45 million in the previous year.

However, during a recent statement, Paytm officials assured that Paytm Wallet and company’s other payment methods such as IMPS, net-banking and cards have continued to grow. It added that the firm registers a huge number of transactions and still dominates digital payments in the country.

Paytm had reportedly claimed that it has more than 50 percent of the market share of mobile payments to retailers and merchants with over 10 million daily transacting users. Notably, the firm also has an offline merchant network with more than 17 million merchants. Moreover, the Indian fintech firm has also diversified its financial services in the recent years to increase revenues.

While on the surface, Google Pay does seem to be leading in registered UPI transactions; with all its other payment gateways, Paytm cannot be easily claimed to be losing.

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On the other hand, Google Pay also seems to be committed to further expansion in the Indian market. It has already partnered with Dunzo, a hyperlocal delivery app. Moreover, it has also introduced a new nearby stores feature, which has already been expanded up to 35 cities.

However, the Delhi High Court’s decision will also be of immense significance for Google Pay’s operations in the country. If Google Pay is found to be operating as a full-fledged payment system provider, the firm would be a direct violation of the Payment Systems Settlement Act 2007. Although, the Reserve Bank of India has said in the High Court that it recognizes Google Pay only as a third-party app provider.

Thus, it is a little difficult to say who is winning right now in the digital transactions’ race of Google Pay vs Paytm.