India’s digital payments ecosystem continues to be dominated by two major platforms, Paytm and PhonePe, each charting distinct corporate paths. Paytm, operated by One97 Communications, recently reported profits, while PhonePe, backed by Walmart, is preparing for a public listing, having filed its Updated Draft Red Herring Prospectus in January 2026. Both platforms provide consumer payments, merchant payments, and financial services distribution built on the Unified Payments Interface (UPI) network. However, differences in transaction volumes, financial results, and monetisation strategies are increasingly visible as both companies report under different frameworks.
For H1 FY26, PhonePe reported revenue from operations of ₹3,918.47 crore, total income of ₹4,174.51 crore, a restated net loss of ₹1,444.42 crore, and Adjusted EBITDA of ₹253.91 crore. Its net worth as of September 30, 2025, was ₹9,539.02 crore. Paytm, in contrast, reported positive EBITDA and profit for the quarter ended September 30, 2025. Its half-year results reflect consistent growth in revenue, merchant subscriptions, and financial services, highlighting stronger earnings visibility despite lower transaction volumes.
During H1 FY26, PhonePe processed a total customer payment value of ₹73.70 lakh crore across 5,340 crore transactions. Merchant payments accounted for ₹8.51 lakh crore through 2,496 crore transactions. Paytm disclosed aggregate H1 FY26 payment volumes, showing smaller but steadily growing throughput. NPCI data as of September 2025 showed PhonePe held 49.15% of customer-initiated UPI transaction value, compared with Paytm’s 5.93%.
As of September 30, 2025, PhonePe reported 65.76 crore registered users, 23.78 crore monthly active customers, and 10.66 crore daily active customers. Paytm reported 7.5 crore monthly transacting users for Q2 FY26. On the merchant side, Paytm had 4.7 crore registered merchants and 1.37 crore active merchant device subscriptions, while PhonePe had 4.72 crore merchants and 91.9 lakh deployed payment devices covering 98.61% of Indian pin codes. Merchant device strategies differ: Paytm emphasises refurbishment to extend device life and reduce costs, while PhonePe monetises through setup fees and recurring subscriptions, supported by deployment incentives.
Paytm generates financial services revenue primarily from merchant loans and equity broking, without balance-sheet guarantees. Over H1 FY26, Paytm earned ₹1,172 crore from financial services. PhonePe earned ₹452.63 crore from lending and insurance distribution in the same period, growing 108.79% year-on-year. Its lending model uses a Default Loss Guarantee (DLG) capped at 5% of disbursals, tying future lending expansion to liquidity and capital buffers.
Paytm operates Paytm Money, with 6.5 lakh customers using equity broking services in Q2 FY26. PhonePe operates Share.Market with 12.6 lakh demat accounts, mutual fund AUM of ₹5,838 crore, and 23.3 lakh SIPs executed monthly. PhonePe emphasises embedded research and seamless product integration.
H1 FY26 highlights the differing strategies of India’s two leading digital payments platforms. PhonePe dominates transaction volumes and network scale but reports statutory losses due to balance-sheet guarantees. Paytm shows profitability and earnings visibility, supported by merchant devices and financial services. With Paytm already listed and PhonePe preparing for an IPO, the contrast between scale, revenue, and monetisation approaches underlines the diversity and maturity of India’s growing digital payments ecosystem.
