“I’m probably the dumbest guy [among the founders of payments companies],” says Ashneer Grover, the CEO and co-founder of BharatPe, a payments app for merchants. “But I’m the dumb guy who figured the one thing others were reluctant to do.” That epiphany, he says, was that consumer-focused payments companies like Paytm*, Flipkart-owned PhonePe, or Amazon Pay would want payments to happen on their own network. A closed network where Paytm users, for example, can only use the app with merchants who accept Paytm. So a merchant needs to have QR codes of multiple companies to cater to different users’ preferences.

Grover’s payments thesis is to develop an ecosystem that rides on Unified Payments Interface (UPI)’s star feature—interoperability. One where merchants need only one QR code allowing users of any payments app to make payments to merchants. Grover wants BharatPe to be that one QR code. Today, a Paytm QR code mostly accepts payments from its wallet. Even though Paytm has about 13 million QR codes out there, only about one million accept UPI payments.

In the last one year, BharatPe has plastered its QR code stickers across 1.5 million merchants in 20 Indian cities. In August, it expects to do 21 million transactions a month worth Rs 600-700 crore ($84-97 million) which, it claims, makes it a market leader. “We have a 50% market share in offline UPI transactions,” says Grover. 

Its rivals are having none of this. PhonePe processed 80 million offline merchant UPI transactions in July 2019, and is on track to do more than 90 million offline UPI transactions in August, said Vivek Lohcheb, head of offline business at PhonePe. “As for BharatPe’s claims that they did 18 million transactions in July, that puts them at less than 15% of the offline merchant transaction share,” said Lohcheb.   

While a source associated with Paytm simply said it does more transactions than BharatPe. The confusion over market share stems from the fact that the National Payments Corporation of India, which runs UPI, does not share any official numbers for merchant transactions. But sources with knowledge of the matter confirmed that of the 800 million-plus transactions UPI sees in a month, 275 million-plus is among merchants, both online and offline. Till a year ago, there were only about 100,000 interoperable UPI QR codes. But this year has seen a huge surge in QR coverage—going up to about 9 million QR codes, according to industry estimates.  

While the market leader debate seemingly has no end, what is clear is the growth in UPI transactions. With 754 million transactions in June 2019, according to NPCI data, UPI transactions are already 86% higher than debit card usage at Point of Sale (PoS) terminals and 4.4 times more frequent than IMPS (Immediate Payment Service) transactions, a payment system used for peer-to-peer payments. As more users get used to UPI, having an offline merchant presence dominates the agenda for payments companies.


Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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