📱💡The Nov 2024 story is all about challenger apps stepping up to the incumbents: PhonePe, Gpay, Paytm and Cred
A few learnings from past research:
1️⃣ The battle for the ubiquitous UPI app seems won, as of now. PhonePe & Gpay dominate with ~50% and ~35% mkt share
2️⃣ Opportunity for category specific UPI Apps: Ex: Groww in investments. Other apps such as Navi for Credit, and SuperMoney - Flipkart focused, similar to AmazonPay
❓What do the Nov '24 numbers say?
✅ UPI value processed: INR 21.55 Lac Crore (~$262B)
✅ UPI # of txns: 15.48 B
✅ Navi crept up to #4 in terms of number of txns. In Sep ‘24, it was at #5, with ~120 Mn txns, behind Cred, which had ~140 Mn txns. It’s also showed up at #8 in terms of value processed in November (INR 8806 Cr), in Sep it was at #11. (INR 6547 Cr)
✅ SuperMoney, which in Sep ‘24 was #18 in terms of value processed (INR 2167 Cr), and #15 in terms of txns processed (49Mn), has gone to #15 in terms of value (INR 3130 Cr), and leapfrogged to #7 in terms of number of txns (78 Mn) in Nov '24
❗But challenger Apps still have low AoVs, and leave ground to be covered in terms of value processed❗
📱💡The average AoV of UPI is ~INR 1400. For the challenger apps: Except for Groww(6.5k) , and Fi (1.2k) the others are below INR 1000. This increases the burden in terms of AoVs to get to value processed. And it also opens an interesting question up: that of trust. AoV's below:
1️⃣ Navi: Rs 575 ($7)
2️⃣ SuperMoney: Rs 398 (~$5)
3️⃣ FamPay: Rs 115 (~$1.5)
4️⃣ Whatsapp: Rs 751 (~$9.1)
5️⃣ Slice: Rs 732 (~$8.9)
Bank apps have higher AoVs than consumer apps. One reason: people just trust banks more to make larger transactions. Ex:
1️⃣ ICICI: Rs 4002 ($48)
2️⃣ SBI: Rs 2901 ($35)
3️⃣ HDFC: Rs 2827 ($34)
PhonePe & Gpay are around the average: 1k - 1.4k. While Cred, with its credit card focus is at ~INR 3657
📱💡And at the end of the day, values processed is key, for which AoV needs to be driven up. It’s a catch 22 situation: How do you drive habits and continuous usage & adoption, AND focus on high AoV: usually items not bought often? One thought is credit: Kiwi, which is a CC on UPI focused app, has an AoV of ~INR 1400, higher than the INR 500-800 slab that most challenger apps sit in. SuperMoney launched a co-branded CC on UPI card with Utkarsh Bank
❓But the customer capacity to download new apps is saturated. How do you distribute?
📱💡New methods usually scale through partnership with checkout and pmt apps (ex: Affirm for BNPL). But why an existing app would allow a new app to leverage its distribution? So then, it leaves the PA / checkout play?
📱💡This has already started happening. Top apps have wisened up and applied / received a PA license. And maybe that’s the next step for challenger apps. A PA license + own checkout, to own the E2E payment initiation
To read the full article, click here: https://lnkd.in/gSpXkinf
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