PhonePe continued to dominate India's digital payments market in July, processing 10.86 billion transactions with a 45.89% market share, up from 10.48 billion in June, according to data released by the National Payments Corporation of India (NPCI). The Walmart-backed payments company processed payments worth ₹14.44 lakh crore, translating into a 48.33% share of UPI's total transaction value. Google Pay maintained its second position with 7.65 billion transactions (up from 7.41 billion in June), accounting for 32.33% of UPI volumes and 33.51% of transaction value, processing ₹10.01 lakh crore worth of payments. Together, PhonePe and Google Pay processed more than three-fourths of UPI transactions in July, with a combined volume share of 78.22% and transaction value share of 81.83%.
India's payments technology sector has raised over $5.8 billion in cumulative equity funding across 371 rounds since 2021, according to data from Tracxn. The sector's funding trajectory shows significant volatility, with $2.8 billion raised across approximately 121 rounds in 2021, followed by a sharp decline to $416 million across 43 rounds in 2025. Funding hit a low of $219 million across 54 rounds in 2024, before recovering to $669 million across 12 rounds so far this year. The funding trend peaked during the 2021 startup boom before correcting through 2022-24, with a tentative recovery in 2026, driven largely by CRED's $540 million funding round. The result is a gradual consolidation of an industry that once appeared to be defined by an almost endless supply of startups, with companies now assembling broader platforms around payments, credit, merchant services and financial technology.
Consumer-facing payments companies accounted for the largest share of funding at about 53 per cent, or nearly $3.1 billion, followed by business payments at 38 per cent or around $2.2 billion. Payments' infrastructure and enablers, including APIs and other underlying technology, accounted for the remaining 9 per cent, or about $526 million. The concentration of capital is particularly pronounced among the top five recipients, with CRED, PhonePe, Pine Labs, Razorpay and BharatPe together accounting for about 66 per cent of the disclosed funding since 2021. These companies have been among the major recipients of equity funding in the payments technology sector, reflecting investor confidence in the UPI-enabled transaction services market. The money has helped create a payments industry that now stretches well beyond the basic act of moving money from one bank account to another, financing consumer apps, merchant platforms, payment infrastructure, credit products and a growing class of companies looking beyond India's borders.
During the five-year period, capital was concentrated among key players with Cred and PhonePe each raising $1 billion, followed by Pine Labs with $641 million, Razorpay with $535 million, and BharatPe with $440 million, as reported by Tracxn. Over their lifetimes, the 10 best-funded companies in the ecosystem have raised about $9.4 billion. Paytm leads with $2.8 billion, followed by PhonePe at $1.7 billion and CRED at $1.5 billion. The numbers reflect a broader change in the startup funding market, where the exuberance of 2021 gave way to a prolonged funding winter between 2022 and 2024. Capital has since begun returning, although investors have become more selective, with scale becoming a form of insurance for companies with established user bases, merchant networks and payment volumes.
Larger funded companies are increasingly becoming acquirers, with Razorpay acquiring Ezetap and IZealiant, while Pine Labs acquired Setu and Mosambee. M2P, Juspay, PayU and Perfios have also pursued acquisitions to add capabilities, indicating consolidation around larger full-stack platforms. The ecosystem is also showing signs of maturity through exits and consolidation, with payments companies recording eight IPOs and 25 acquisitions since 2021. Eight payments companies have gone public since 2021, including Paytm, which listed in November 2021, and Pine Labs, which followed in November 2025. MobiKwik and Zaggle are among the other companies to have made the transition from private markets to public ones, with acquisitions offering another measure of maturity in the industry.
The report highlighted UPI's growing international footprint as another development, with cross-border UPI transactions rising more than 20-fold from about 37,060 in FY24 to over 7.5 lakh in FY25. The payment rail is now live in more than 12 countries, expanding beyond India's domestic market. UPI has become one of the world's largest real-time payment systems, with India accounting for roughly 49% of global real-time payment transactions, according to ACI Worldwide. In the financial year ended March 2026, UPI processed transactions worth about ₹314 lakh crore, at a pace of roughly 66 crore transactions a day. The next phase will depend on how the UPI ecosystem is funded, as while UPI itself has created a large transaction base, private capital has financed products and capabilities around the rail, including credit-on-UPI, cross-border payments and fraud prevention. The sustainability of both the public payment rail and the commercial ecosystem around it will be critical to the next phase of growth.
