UPI Transactions Jump 3.8% MoM In May, Cross 23 Bn Mark

UPI transactions rose 3.8% MoM to 23.20 Bn in May 2026, with total transaction value increasing 3% to ₹29.90 Lakh Cr

On a YoY basis, volumes zoomed 24% from 18.71 Bn transactions and transaction value jumped 19% from ₹25.10 Lakh Cr

While the data for UPI app players’ performance in May will be released after a few weeks, PhonePe and Google Pay continued to lead the sector in April

UPI transactions rose 3.8% MoM to 23.20 Bn in May 2026 from 22.35 Bn in April. As per NPCI data, the total transaction value also inched up 3% to ₹29.90 Lakh Cr from ₹29.03 Lakh Cr in the previous month.

On a YoY basis, volumes zoomed 24% from 18.71 Bn transactions and transaction value jumped 19% from ₹25.10 Lakh Cr.

Average daily activity in May showed steady usage trends. Transaction count rose slightly to 748 Mn from 745 Mn in April, up around 0.4%. However, average daily transaction value edged down to ₹96,465 Cr from ₹96,766 Cr, a decline of about 0.3%.

While the data for UPI app players’ performance in May will be released after a few weeks, PhonePe and Google Pay continued to lead the sector in April. 

In April, PhonePe processed over 1,033 Cr transactions worth ₹14.31 Lakh Cr. Although this was slightly lower than the previous month, its market share improved to 47.07%. 

Google Pay remained firmly in second place with 735.9 Cr transactions, with its share edging up to 33.54%. Paytm continued at third position with 177.8 Cr transactions, seeing a marginal increase in market share to 8.10%.

Together, PhonePe and Google Pay accounted for more than 80% of total UPI transactions in April, highlighting how heavily the market remains concentrated among the leading players.

Meanwhile, the NPCI is reportedly working on a shared UPI soundbox infrastructure that would allow merchants to accept payments from any app through a single device, as it seeks to improve interoperability and encourage competition in an increasingly concentrated UPI market.

Currently, merchants often maintain separate soundboxes for PhonePe, Paytm and Google Pay. The proposed system aims to reduce hardware duplication and streamline settlements for offline merchants, though it could affect fintech companies that earn recurring rental income from the devices.

Separately, NPCI officials held discussions with smaller UPI players last month over a long-pending proposal to cap any single app’s market share at 30%. 

The talks focused on boosting competition through preferential incentives, early feature access and eased autopay restrictions. The NPCI first proposed the cap in 2020 but has repeatedly delayed enforcement. The current timeline for implementing the market share cap is December 31, 2026.

Source: Inc42 - Startups