“This surge has happened on user numbers, but the company is (also) seeing faster growth on the merchant side. Closer to the February 29 deadline that the Reserve Bank of India has set for Paytm Payments Bank to halt its services, the user growth through app installs and transactions is likely to pick up more,” one of the people said.
Another person said PhonePe has already started preparing its systems on the backend to handle the additional capacity.
“User additions and transaction volumes are only expected to grow further in the coming days and weeks, especially given the lack of clarity around Paytm’s business,” the second person said. “So far, the growth witnessed is mostly organic…but PhonePe is also looking to pull customers as well as merchants in through campaigns,” he added.
Queries sent to PhonePe did not elicit a response till press time Monday.
ET reported on Monday that PhonePe is likely to be the biggest gainer from the ongoing crisis at Noida-headquartered Paytm, and that it has begun a campaign to onboard new users and merchants.
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As on December 31, Paytm had around 39.3 million merchants on its platform, which had facilitated 11.85 billion transactions valued at Rs 999 crore during the October-December period.
ETtechPhonePe is already the leader in terms of UPI transaction volumes having a 46% share in the October-December period. This market share is likely to grow as users migrate from Paytm to PhonePe, the second person cited earlier said.
On Monday, ET also reported, citing people aware of transaction patterns, that the two largest players – PhonePe and Google Pay – stand to gain more than the others from the developments at Paytm, since the newer entrants trying to acquire users are yet to move the needle in terms of market share dynamics.