Flipkart’s digital payments app PhonePe saw a 77% rise in the number of unique smartphone users who installed the app in the year through March 2019, while the figure stayed largely flat for its biggest rival Paytm in the same period, according to data from research platform Kalagato Pte Ltd.
PhonePe accounted for 41.41% of overall unique smartphones installs in March 2019 among the top nine payments apps and wallets in India. This is a significant increase over the 23.37% a year earlier. Paytm accounted for 53.03% of overall unique smartphone installs in March, up from 51.28% a year earlier.
The data shows that though Paytm leads the market in terms of app installs with a 43% share in March 2019, PhonePe is fast catching up with a 33.4% share.
The National Payments Corporation of India’s Bharat Interface for Money (BHIM) app came third with just a 9.8% market share in terms of unique smartphone users who installed the app in March this year, falling from a 10.8% market share a year earlier. Among the top nine wallets surveyed, including Citrus, Freecharge, Jio Money, MobiKwik, Paytm, Payzapp, PhonePe, and SBI Buddy, the government’s BHIM app was uniquely downloaded by 12.13% of 1.2 million users that Kalagato studied.
However, when it comes to the number of monthly transactions, Paytm users accounted for 72% of all transactions in March 2019. PhonePe’s market share in terms of monthly transactions fell from around 23.72% in October 2018 to around 12.31% in March 2019,, according to data from Kalagato.
Amazon Pay, also lost market share in terms of monthly transactions to Paytm. Amazon Pay had a 14.63% market share last October. However by March, it came third, accounting for just 7% of all transactions made by the 1.2 million users studied by Kalagato.
Kalagato data also shows that users preferred apps such as Payzapp, owned by HDFC Bank, and Mobikwik, to make high-value transactions. However, when it comes to making small-value transactions, users preferred a Paytm wallet, which requires a standalone wallet balance.
Payzapp came first in terms of average transaction size, generating around ₹2,743.3 per transaction in March 2019. MobiKwik was in second place with an average transaction size of ₹1,141.6 in the same month.
PhonePe came third with an average transaction size of ₹973 in March 2019, while for Paytm this figure was ₹500 in the same month.
PayZapp users on an average refilled their wallet at least 4.03 times in March 2019, while Paytm users did so at least 2.75 times and MobiKwik users 2.05 times in the same month. PhonePe users, however, had the least number of wallet refills among these four with just 1.86 times.
On average, Paytm users made four transactions a month in March, while Payzapp users made three transactions.
MobiKwik took the third place in terms of the average frequency of transactions with users utilizing the wallet at least twice a month in March 2019.
PhonePe took the fifth spot with an average frequency of transaction of 2.02 times, after Amazon Pay which took the fourth sport with an average frequency of 2.05 times.
“Paytm’s dominance is not surprising given the amount of funding it raised and the brand it has built. The average transaction frequency of Paytm is much higher than that of its peers. This implies that they have been successful in creating a habit (of transactions) among their user base. A low transaction value should not be viewed negatively, as users are paying for everyday use products and services rather than one-off high-value items where discounts are key," said Aman Kumar, chief business officer, Kalagato Pte Ltd.