Competitive Landscape Analysis of Payment Systems in India

India's payment system has undergone rapid changes in recent years, resulting in a diverse and competitive landscape. It is analysed below along four dimensions: market players, technology drivers, regulatory environment and future trends:

I. Core market participants

1. UPI Ecological Leader::

• NPCI (National Payments Corporation): as an organisation under the Central Bank, leads the UPI infrastructure development
• PhonePe (Walmart Holdings): 48.31 TP3T market share by 2023, over 4.5 billion monthly transactions
• Google Pay: 34% market share, deep integration with the Android ecosystem
• Paytm: share falls to 8% after RBI sanctions, but wallet business maintains dominance

2. Traditional financial institutions::

• Banking apps (e.g. iMobile by ICICI): Enhancing user experience through direct account connectivity
• RuPay card network: local card organisations capture Visa/Mastercard share (45% issued)

3. emerging challenger::

• Amazon Pay: Relying on e-commerce scenarios to boost penetration to 5%
• WhatsApp Pay: social payment potential yet to be fully unlocked (user base of over 500 million)

II. Technology-driven competitive differentiation

1. infrastructure layer::

   • UPI 2.0 enhancements (e.g., offline payments, invoice payments) are the new battleground, with PhonePe being the first to support smart payment codes
   • BBPS (Bharat Bill Payment System) integration makes utility bill payment a must-have scenario, Paytm takes 381 TP3T market share

2. Value-added service innovation::

   • credit penetration: Google Pay partners with Axis Bank for instant loans (8-second approvals), keeping bad loans below 1.21 TP3T
   • Cross-border payments: Razorpay X Launches Global Receipt Account with 50+ Currency Conversion Support (Rates 60% Lower Than Traditional Banks)

3. AI Application Competition::

   • Paytm's 'Al-powered Fraud Radar' Boosts Fraud Transaction Recognition Rate to 99.7%
   • CRED uses behavioural analysis algorithms to dynamically adjust credit scores (user stickiness increased by 3x)

III. Regulatory-induced reshaping of the landscape

1. Impact of new regulations in 2024::

   • RBI's increase in capital requirement for Third Party Application Providers (TPAPs) to ₹50 crore has led to 12 small and medium platforms exiting the market
     case (law): MobiKwik forced to transform itself into a pure technology provider

2. Data localisation controversy: Visa fined ₹5 crore for not fully complying with data storage rules, indirectly favouring indigenous solutions

3. CBDC pilot effect:Digital Rupee (e-Rupee) crosses 1 million transactions per day, hits wallet business logic - Paytm wallet balance down 171 TP3T YoY

IV. Forecast of key points for future success

Potential Disruptor Assessment:

• Jio Financial Services: Reliance Retail Eco + JioPhone Downmarket Combo
• Tata Neu: Super App strategy could replicate WeChat Pay path
• Pine Labs: B-Side Acquiring Market Share Reaches 29%, Dark Horse for Enterprise Payments