What is noteworthy in this latest showdown is that both the payment firms are investee companies of Japan’s SoftBank Group Corp.
Flipkart’s digital payments arm PhonePe has taken a jibe at India’s largest digital payments firm Paytm by questioning the latter’s claim of being the largest player on the Unified Payments Interface (UPI) platform, bringing an unprecedented faceoff between India’s two leading digital payment firms.
What is noteworthy in this latest showdown is that both the payment firms are investee companies of Japan’s SoftBank Group Corp. In a blog post on Thursday, PhonePe referred to Paytm’s claim of being the biggest payments network on UPI as “unidimensional and misleading”.
The latest salvo from PhonePe comes two months after its founder and CEO Sameer Nigam in a tweet, which was later deleted, said about Paytm’s volumes on UPI being inflated by Re 1 cashbacks.
PhonePe, in its latest blog, stated, “The average PhonePe customer does about five transactions per month, while the comparable figure for Paytm is 525. This is simply not representative of normal user behaviour on the UPI network."
Paytm hasn’t put out any official statement at the time this article was published. In the blog titled, 'All that glitters is not gold', PhonePe said, “Just 40,000 unique consumers did 500+ transactions each in February on Paytm. Paytm’s average transaction value is less than Rs 40. In contrast, 6,000,000 unique customers did five transactions each in February on PhonePe. Our average transaction value is over Rs 1,800.”
PhonePe added, “At an overall network level, UPI’s overall transaction value is Rs 1,116/transaction. For Paytm, the number is a paltry Rs 38, which further corroborates [the fact that] these are all cashback-triggered low ASP transactions”.
The recent volley of criticism from PhonePe also comes a month after Paytm’s Vijay Shekhar Sharma alleged that an unfair playing field had been made available to messaging giant WhatsApp, which recently began testing its payment service in India.
Recently, WhatsApp started testing its payment features in India, and Google launched chat features on its payment platform, Tez. Both the payment platforms from the global giants are threatening to disrupt dominance of existing big players in India’s nascent digital payments ecosystem.