Walmart Inc. and Google are gaining ground on Paytm, the fintech trailblazer from India that is having difficulty navigating limitations imposed by central banks and the impending closure of a major payments affiliate.

The National Payments Council of India stated on its website on Wednesday that the value of Paytm payments made on the country's state-backed transactions system dropped 14% to Rs 1.65 trillion ($19.9 billion) from January. Walmart-owned PhonePe and Google’s GPay, which both process far more payments than No. 3 Paytm, each had an increase in their payments value.

The decrease of Paytm indicates that users are switching to other providers even in advance of any systemic issues. Paytm anticipates its digital payment services to continue operating normally even after the new restrictions take effect on March 15. However, since the regulator made its move public in late January, the company's shares has plummeted due to fears that the limitations may limit the fintech pioneer's future opportunities.

One 97

According to NPCI data, the value of transactions handled by PhonePe increased by roughly 7%, while GPay saw an increase of almost 6%. Paytm saw a decrease in payments volume, whereas PhonePe and GPay saw growth.

The Unified Payments Interface is a state-backed system that does not generate revenue for the companies using it, but it gives them access to hundreds of millions of customers to whom they may cross-sell services like mutual funds and insurance.

On January 31, the Reserve Bank of India issued an order to Paytm Payments Bank, which handles the majority of Paytm's financial services and payments but is not under its control, to cease operations. Even while Paytm swiftly forged new bank alliances to continue operating, the regulator's action precipitated a precipitous decline in the company's stock and negatively impacted consumer perception. Paytm's stock has dropped by over 50% since the end of January.

This week, the billionaire founder of Paytm, Vijay Shekhar Sharma, expressed confidence in the company's ability to overcome regulatory setbacks and emerge stronger in his first public remarks since the RBI move. Paytm is a digital payments startup.

Sharma's fintech empire includes both Paytm Payments Bank and Paytm, which is traded as One97 Communications Ltd.; however, the bank is not listed. One97 has the remaining 51% of the bank, while Sharma owns 51% of it.

Even before Paytm's associate bank was subject to restrictions, PhonePe and GPay had consistently outperformed Paytm in terms of volume and value of UPI transactions.