UPI Transactions Dip in February; PhonePe, Google Pay and Paytm Retain Market Leadership

India’s Unified Payments Interface (UPI) recorded a month-on-month slowdown in February, with both transaction volume and value declining compared with January. Despite the dip across the ecosystem, leading digital payment platforms continued to retain their positions at the top of the market. 

PhonePe and Google Pay Continue to Lead the UPI Ecosystem 

PhonePe maintained its position as the largest UPI platform even though its transaction volume fell during the month. The platform processed 928.3 crore transactions in February, compared with 991.3 crore in January, representing a decline of more than 6%. The value of payments handled by the platform reached ₹13.1 lakh crore during the month. Its market share stood at 46.5%, marginally lower than 46.6% recorded in January. 

Google Pay remained the second-largest player in the ecosystem. The platform handled 676.7 crore transactions in February, down from 722.9 crore transactions in January, with a total transaction value of ₹9.03 lakh crore. Despite the decline in volume, its market share remained steady at 34%. 

Paytm and Other Apps Maintain Positions Despite Volume Decline 

Paytm continued to hold the third spot among UPI applications. The platform processed 159.9 crore transactions worth ₹1.74 lakh crore in February, slightly lower than 165.9 crore transactions worth ₹1.81 lakh crore in the previous month. Even though transaction volumes declined, Paytm’s market share increased slightly to 8%. 

Navi retained the fourth position on the leaderboard with 65 crore transactions worth ₹36,563 crore. Another emerging platform, super.money, reported 28.9 crore transactions, marginally higher than the 28.7 crore transactions recorded earlier. 

NPCI’s Bharat Interface for Money (BHIM) also saw an improvement in activity. The app processed 17.5 crore transactions in February, compared with 17.2 crore transactions in January, while its market share rose to 0.9% from 0.8%. BHIM had earlier moved ahead of CRED and FamApp in the rankings. 

Meanwhile, FamApp recorded 14.9 crore transactions, down from 16.1 crore in the previous month, resulting in a slight decline in its market share. CRED processed 14.5 crore transactions, with its market share remaining unchanged. 

Overall UPI Activity Declines; Policy Debate on MDR Intensifies 

The overall slowdown in individual app volumes came as the broader UPI ecosystem also recorded a monthly decline. According to data from the National Payments Corporation of India (NPCI), UPI transactions fell 6% to 20.39 billion in February from 21.70 billion in January. The total transaction value declined 5% to ₹26.84 lakh crore from ₹28.33 lakh crore during the same period. 

Even as activity moderated, discussions around the financial sustainability of the ecosystem have intensified. A parliamentary panel recently recommended revisiting the Merchant Discount Rate (MDR) framework. MDR refers to the fee merchants pay to banks and payment service providers for processing digital transactions.  

The Central Board of Direct Taxes (CBDT) removed MDR on Person-to-Merchant UPI transactions in 2020, resulting in a zero-MDR regime. 

Industry bodies such as the Payments Council of India (PCI) have been urging the government to reconsider the policy so that ecosystem participants can generate revenue directly instead of relying primarily on government support. 

To sustain the ecosystem in the meantime, the government continues to provide incentives. In the Union Budget 2026–27, the Centre allocated ₹2,000 crore under an incentive scheme aimed at promoting transactions through RuPay debit cards and low-value BHIM-UPI payments of up to ₹2,000. This allocation is nearly five times higher than the ₹437 crore budgeted for FY26, though slightly lower than the revised estimate of ₹2,196 crore for that year. 

Read More: NPCI Breaks Silence On ‘Digital Lutera’ Malware Report, Here is What it Said About UPI Security 

Conclusion 

Despite a decline in UPI transactions in February, PhonePe, Google Pay and Paytm retained their leading positions, while policy discussions on MDR and incentives continued to focus on sustaining India’s digital payments ecosystem. 

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