The number of UPI (Unified Payments Interface) transactions grew by 4.4% in May, reaching a new record of 18.68 billion transactions. In April, there were 17.89 billion transactions. Compared to last year, UPI transactions increased by 33%.
In April, UPI transactions had dropped slightly by 2.2% compared to March.
According to data from the National Payments Corporation of India (NPCI), the total money moved through UPI in May was ₹25.14 lakh crore, which is 5% higher than the ₹23.95 lakh crore in April. On average, there were 602 million transactions every day in May, up from 596 million daily transactions in April. The average daily amount of money transferred was ₹81,106 crore.
Who’s Leading UPI?
NPCI has not yet shared the app-wise transaction numbers for May. But PhonePe and Google Pay are expected to remain the top two UPI apps, as they have been for years.
Together, PhonePe and Google Pay hold about 80% of the UPI market. Paytm is in third place, with around 7% of the market share.
In April, PhonePe handled 8.36 billion transactions, while Google Pay had 6.48 billion transactions worth ₹8.42 lakh crore.
Other apps like Navi, CRED, super.money, Amazon Pay, and FamApp are also competing for users and moving up and down the leaderboard.
NPCI has been thinking about limiting third-party UPI apps to only 30% of the market share. This rule has been postponed several times, and the new deadline to enforce it is December 31, 2026.
The MDR (Merchant Discount Rate) Discussion
Even though UPI is growing fast, many in the industry want the government to reconsider charging zero MDR on UPI transactions.
MDR is a small fee that merchants pay banks or payment providers when they accept digital payments. In 2020, the government made this fee zero to encourage digital payments.
This year, the Payment Councils of India (PCI) asked Prime Minister Narendra Modi to bring back a small MDR charge of 0.30% but only for large merchants. The Startup Policy Forum (SPF) also supports this idea.
Payment companies say they cannot earn money to improve their services because of the zero MDR rule, which affects their investments in better technology. The government has not yet made a final decision on this.
Meanwhile, Paytm’s founder Vijay Shekhar Sharma said that if MDR is introduced, it might lead to more competition in the UPI market.
