PhonePe Tops UPI Charts as BHIM Overtakes CRED: What’s Driving the Shift?
New Delhi: The Indian digital payments landscape is witnessing a significant reconfiguration. While PhonePe continues its undisputed reign at the top of the Unified Payments Interface (UPI) charts, the lower rankings are seeing a surprising shake-up. Most notably, the government-backed BHIM (Bharat Interface for Money) app has surged ahead of the fintech unicorn CRED in terms of transaction volume, signaling a shift in consumer behavior and the impact of recent policy incentives.
PhonePe: The Unshakable Leader
PhonePe remains the dominant force in the UPI ecosystem, consistently processing over 45% of all UPI transactions by volume. In the most recent data cycles, PhonePe handled approximately 9.8 billion transactions, commanding nearly 50% of the total transaction value in the country.
The Walmart-owned fintech’s success is attributed to its massive merchant network, particularly in Tier-2 and Tier-3 cities, and its "super-app" strategy that integrates insurance, wealth management, and utility payments. Despite the National Payments Corporation of India’s (NPCI) proposed 30% market cap, PhonePe and Google Pay together still control over 80% of the market.
The BHIM Resurgence
The most striking development is the comeback of BHIM. After years of stagnating with a market share of around 1%, BHIM has recently overtaken CRED in transaction volume. While BHIM recorded upwards of 158 million transactions, CRED slipped slightly behind in the volume race.
What is driving BHIM’s growth?
Government Incentives: The Union Cabinet recently approved a ₹1,500 crore incentive scheme to promote low-value BHIM-UPI transactions (Person-to-Merchant). This has encouraged small vendors and price-sensitive users to return to the platform.
Product Overhaul: The rollout of BHIM 3.0 brought a revamped UI, support for 15+ languages, and new features like "Family Mode" and "Spend Analytics," making it more competitive with private players.
Zero MDR Advantage: For small merchants, BHIM remains the most cost-effective way to accept digital payments, backed by the trust of the government.
CRED’s High-Value Niche
While CRED has been overtaken by BHIM in terms of volume, it remains a "value" powerhouse. CRED’s transaction volume is lower because its user base is restricted to high-credit-score individuals. However, the average transaction value (ATV) on CRED is nearly three times higher than that of BHIM. CRED users typically use the app for large-ticket items like rent, education fees, and credit card bills, rather than micro-payments at grocery stores.
Emerging Challengers
The shift isn't just between BHIM and CRED. New entrants like Flipkart-backed super.money and Sachin Bansal’s Navi are aggressively gaining ground. These apps are using high cashback incentives and gamified rewards to peel away users from the "Big Three" (PhonePe, Google Pay, and Paytm).
Conclusion
The UPI market is no longer a static two-player game. While PhonePe’s lead is secure for now, the rise of BHIM proves that government intervention and product refinement can still disrupt the market. As the NPCI continues to push for a more diversified ecosystem to reduce "systemic risk," the battle for the #4 to #10 spots will only intensify.