I'm positive you've never told a shopkeeper: "Can I pay with UPI?" UPI, or Unified Payments Interface, is the real-time digital-payments system that took a sledgehammer to how Indians paid for purchases or transferred money. It saw a colossal 7.8 billion transactions in December 2022. But 'UPI' is seldom used in common parlance. Almost always, Google Pay, PhonePe, or Paytm serve as a proxy for UPI. Even though there are countless UPI apps, the real fight has always been between the first two. In 2019, Google Pay was the market leader by share, but its Walmart-owned rival pulled ahead the following year. PhonePe's market share in December was over 40%. But at 38% in 2020, Google Pay had every reason to believe it could be back on top soon. Cut to December 2022, though, and it was clear Google Pay was mistaken. Its market share had slid to 35%, while PhonePe's had risen to 47%. How did Google Pay allow the gap to widen so much? But I'll say this: it has much to do with the payments app's relationship with its banking partners and how much control it gives them
