State Bank of India (SBI), country’s largest bank by assets, lost market share in almost all modes of digital transactions between 2017-18 and 2018-19, data from the bank’s latest annual report showed.
The bank’s market share in the point of sale (POS) network dropped to 15.93% at the end of FY19 from 20.2% at the end of FY18. As on March 31, 2019, SBI had a network of 5.75 lakh POS terminals, up from 13% from March 31, 2018. In terms of debit card spends, SBI’s share dropped to 29.89% at the end of March 2019 from 30.4% a year ago.
In mobile banking volumes, SBI’s FY19-end market share fell to 15.01% from 21.2% a year ago. The bank’s market share in the Real Time Gross Settlement (RTGS) channel was flat at over 13%, as compared to 13.36% at the end of FY18. The only channel where SBI showed a clear gain in market share was the National Electronics Fund Transfer (NEFT) channel, where its share inched up to 17% at the end of FY19 from 15.19% at the end of FY18.
As for the Unified Payments Interface (UPI) channel, SBI’s share in volume terms stood at 24% and in value terms at 25.4% at the end of FY19. The bank processed 129 crore transactions worth over `2.96 lakh crore during the year. Comparable figures for FY18 are unavailable.
Legacy banks losing share in digital transactions may be a consequence of a handful of new-age payment banks making inroads into the market. FY19 turned out to be the year when payments banks broke into the top 10 mobile-banking players in volume terms. As Paytm Payments Bank cements its position as the market leader in this category of digital transactions, Airtel Payments Bank climbed up the table too, leaving behind the likes of Bank of India and Kotak Mahindra Bank.
March 2019 saw Paytm account for over 19% of all mobile-banking transactions, while Airtel’s Payments Bank contributed more than 5% of the 867 million transactions made during the month.
Banks, for their part, are clear that digital payments are more of a facilitator to their core business than a source of revenue. PK Gupta, MD, retail and digital banking, SBI, said recently that moving to digital helps banks cut costs.
“It doesn’t really matter whether transactions happen on the banks’ app or a third-party app as the transaction ultimately is getting settled within the bank.As long as banks get the deposit and CASA (current account savings account deposits), it should not really matter,” Gupta observed.