Discover PhonePe's 2023 success story – revenue, awards, and innovations in focus. Witness the evolution of digital finance excellence."

2. PhonePe is an Indian digital payments and financial services company headquartered in
Bangalore, Karnataka, India. PhonePe was founded in December 2015 by Sameer Nigam,
Rahul Chari, and Burzin Engineer.
The PhonePe app, based on the Unified Payments Interface (UPI), went live in August
2016. The PhonePe app is available in 11 Indian languages.
Using PhonePe, users can send and receive money, recharge mobile, DTH, and data
cards, make utility payments, pay at shops, invest in tax-saving funds, buy insurance,
mutual funds, and digital gold. PhonePe was incorporated in December 2015.
In April 2016, the company was acquired by Flipkart, and as part of the acquisition, the
FxMart license was transferred to PhonePe and rebranded as the PhonePe wallet.
PhonePe's founder, Sameer Nigam, was appointed as the CEO of the company.
In August 2016, the company partnered with Yes Bank to launch a UPI-based mobile
payment app based on the government-backed UPI platform. Within three months of its
launch, the app was downloaded by over one million users.
In 2018, PhonePe became the fastest Indian payment app to get a five-crore badge on
the Google Play Store. The PhonePe app overtook BHIM to become the market leader in
UPI transactions in August 2017.
In 2022, PhonePe became the first UPI TPAP (Third Party Application Providers) app to
allow UPI activation through Aadhaar. A year later, it further expanded its services by
launching international UPI payments, allowing Indian users traveling abroad to pay
foreign merchants with the Unified Payments Interface (UPI).
As per NPCI's UPI ecosystem statistics, PhonePe currently holds a 50% market share
based on the value of transactions in the UPI market.
In April 2023, PhonePe launched a new shopping app called ‘Pin Code’, focused on
hyperlocal e-commerce and built on top of the ONDC platform.
Ownership and Funding:
In December 2020, Flipkart and PhonePe declared a partial split, with Walmart
maintaining its majority ownership in PhonePe and the two entities now functioning

3. independently. PhonePe announced the acquisition of $350 million from General
Atlantic, a US growth equity firm, at a pre-money valuation of $12 billion.
Subsequently, another $100 million was attained in primary capital in February 2023
from Ribbit Capital, Tiger Global, and TVS Capital Funds, followed by $200 million in
primary capital from Walmart and another $100 million from General Atlantic at the
same valuation. This brings the total amount of funding raised by PhonePe to $850
million.
Licenses Received:
In April 2021, PhonePe Wealth Broking Private Limited, a subsidiary of PhonePe,
registered with the Securities Exchange Board of India as a stockbroker and depository
participant.
It holds an ARN from the Association of Mutual Funds of India, enabling the distribution
of mutual funds. In August 2021, PhonePe Insurance Broking Services Private Limited, a
subsidiary of PhonePe, received an insurance broking license from the Insurance
Regulatory and Development Authority of India. This registration allows the company to
distribute insurance products from all insurance companies in India.
In March 2022, it was also registered as a Bharat Bill Payment Operating Unit with the
Reserve Bank of India (RBI) under the Bharat Bill Payment Systems. In January 2023,
PhonePe Technology Services Private Limited, a subsidiary of PhonePe, obtained
regulatory approval from the Reserve Bank of India (RBI) to operate as an account
aggregator.
The license allows the company to introduce a platform facilitating a secure and
consent-based exchange of financial data between users and providers of financial
information. In March 2023, PhonePe obtained in-principle approval from the RBI to
serve as a payment aggregator.
Awards and Recognition:
2018: Won the UPI Digital Innovation Award from NPCI in 2018.
2019: Awarded the 'Best Digital Wallet' initiative at the 8th Annual Indian Retail &
e-Retail Awards 2019, organized by Zee Business and The Economic Times.

4. 2021: Won two awards at the IAMAI India Digital Awards.
2021: Gold for Excellence in Wealth Management (for Mutual Funds category) and Silver
for Unstoppable India video
2021: Won the ‘Excellence in Insurtech’ award at Assocham's Fintech & Digital Payments
Awards 2021.
2022: PhonePe won the ‘Fintech of the Year’ award at the BW Festival of Fintech Awards
2022.
2023: PhonePe won ‘Best Product/Service Innovation—'End'-to-End Digital Journey for
Motor Insurance' at the ET BFSI Excellence Awards 2022.
ESOP:
PhonePe allots employee stock options (ESOPs) to its full-time employees. In November
2021, PhonePe was reported to have conducted a buyback of ESOPs worth ₹135 crore,
covering 75% of its current workforce who have completed at least a year of service.
Business Model:
PhonePe is a UPI-based payment platform that facilitates money transfers between bank
accounts. In addition to its core payment services, the PhonePe mobile app offers
various features that enable users to purchase products and access services such as
groceries, insurance, and food.
The company’s role involves promoting these products and services to its users.
PhonePe also provides convenient options for mobile recharge and enables users to pay
their electricity and gas bills through the app. Notably, PhonePe has introduced a
point-of-sale (POS) machine, which has become prevalent in shops and Kirana stores
across India.
This POS system allows customers to make payments conveniently using PhonePe.
Recently, PhonePe obtained a license from the Insurance Regulatory and Development
Authority of India (IRDAI) to operate as an insurance brokerage firm. This authorization
enables PhonePe to offer insurance products from multiple insurance companies to its
customers. Moreover, PhonePe has the opportunity to provide personalized insurance

5. offerings to its large user base, leveraging its digital platform. With its expanding range
of services, PhonePe continues to enhance its position as a comprehensive digital
payment and commerce platform, catering to the diverse needs of its users.
Revenue Model:
PhonePe generates revenue through various means, including commissions from
product promotions on its app and partnerships with partners through its ‘Switch’
platform. Similar to recharge points or centers that earn commissions from telecom
companies when customers recharge their phones, PhonePe also receives a commission
when users recharge their phones through its app.
The company also earns a commission from online purchases made by users through its
platform. With its large user database, PhonePe leverages data insights to understand
payment patterns, customer purchasing behavior, and retailer/store details, contributing
to its profitability. The platform continues to expand its customer base through
promotions and offers.
However, PhonePe recently announced that it would be experimenting with processing
fees for mobile recharges made through its app. As of October 23, 2021, the platform
introduced a small-scale experiment where processing fees of up to Rs 2 would be
charged. Recharges between Rs 50 and 100 would incur a fee of Rs 1, while recharges
above Rs 100 would have a fee of Rs 2. Recharges below Rs 50 remain free.
This move has garnered mixed reactions from users, with some expressing concerns and
potentially considering alternative platforms. PhonePe’s competitor, Paytm, also voiced
opposition to the concept of charging customers, emphasizing the importance of
building trust without additional costs.
Innovation and Partnerships:
PhonePe helps merchants accept payments through all UPI-based apps, debit and credit
cards, as well as wallets (including third-party wallets) on the app.
2017: In October, PhonePe launched a low-cost POS device built in India. The
Bluetooth-enabled POS device looks like a calculator and works with AA batteries. The
hardware uses Bluetooth connectivity and enables payments through all the mobile
devices that can access the PhonePe app.

6. 2018: PhonePe partnered with FreeCall in January 2018. This partnership enabled
PhonePe users to link their existing FreeCharge wallets to the PhonePe app. PhonePe
has also entered into similar partnerships with Jio Money and Airtel Money.
2019: PhonePe launched tax-saving funds to help customers minimize their tax burden
by investing in equity-linked saving schemes. In the same year, PhonePe also became the
first payment app to allow customers to make bids for initial public offerings through the
UPI platform.
2020: In January, PhonePe became the first digital payment platform in India to launch
international travel insurance. PhonePe also launched the Liquid Fund in association
with Aditya Birla Mutual Fund to provide the combined benefits of a fixed deposit and a
mutual fund.
2021: In March, PhonePe became the first digital payments platform to cross 100 crore
monthly transactions on UPI, clocking almost 130 crore transactions across all of its
payment offerings, including third-party debit and credit cards and its own digital wallet.
PhonePe also emerged as the leader in terms of transactions processed on the Bharat
Bill Payment System. It has reportedly registered over 10 lakh UPI-enabled AutoPay
mandates since the launch of the AutoPay functionality feature. It had also processed
over 200 crore monthly transactions on its platform in October.
2022: In May 2022, PhonePe announced the acquisition of the wealth management
platform WealthDesk and the smart beta wealth management platform OpenQ. The
acquisitions were done with the aim of widening PhonePe's offerings in the wealth
management space. In April 2022, PhonePe crossed 10 crore transactions a day. By
September 2022, PhonePe had enabled the digitization of payments for 80 lakh
merchants under the RBI Payments Infrastructure Development Fund (PIDF) scheme.
2023: In January, PhonePe declared the completion of its domicile shift to India and its
full separation from Flipkart. In February, PhonePe became the first fintech platform to
enable cross-border UPI payments. In March, PhonePe hit an annualized TPV (total
payment value) run-rate of USD $1 trillion (Rs. 84 Lac Crs). In April 2023, PhonePe
launched a shopping app called ‘Pin Code'. It is a dedicated shopping app that focuses on
hyperlocal e-commerce, catering to the specific needs of users within their locality. The
app leverages the power of ONDC, a technology platform developed by the Government
of India.

7. Customer Relationship Management:
With the majority of customer service queries coming on mobile, PhonePe has invested
in live chat and chatbots alongside traditional channels like email and phone. PhonePe
started deploying chatbots to automate common service inquiries like “What’s my
balance?" They eventually went on to automate 850 decision items and integrate their
ERP systems with the Freddy Bot platform.
PhonePe resolves 80% of its customer service inquiries without human intervention.
They’ve also realized higher CSAT scores for bots compared to traditional channels of
service. To overcome the challenge of training agents on constantly growing services and
scenarios, PhonePe has deployed a Freddy agent-assist bot that helps agents with
customer context, guided workflows, and next-best actions.
SWOT ANALYSIS: STRENGTH:
● PhonePe is an RBI-authorized company and has registered as a partial payment
system with the RBI.
● SAFE AND SECURE: The platform assures users that their financial details are
secured and protected against cybercriminals. Phones are 100% safe and secure.
It is powered by Yes Bank. All payments happen over a secure banking network,
and the app does not store any user data or password. All you need to do for
every transaction is enter your MPIN.
● Risk Investigation: Our risk investigation team handles fraud incidents reported
via various channels and provides assistance to customers, vendors, partners, and
external agencies. This team also acts as a definitive line of defense against
fraudsters by intercepting fraudulent transactions.
● EASY AND CONVENIENT TRANSACTIONS: The maximum limit is Rs. 1 lakh for
auto-pay and reminders. Bank numbers and IFSC codes need to be mentioned
after being linked to the bank account.
● AUTO PAY: The PhonePe app gives you the facility of autopaying your dues. The
first time you have to proceed with the process of making a payment, you will be
asked to set up autopay for the next time. If you choose this option, next time you
don’t need to proceed with the full procedure.
WEAKNESS:

8. ● It also happens when you pay to a merchant and the message is displayed:
Payment is successful. Your account is also debited for that number, but the
receiver account is credit-less. In certain cases, credit processing can take up to 24
hours. It frequently causes you emotional distress.
● DELAY IN PAYMENT: Sometimes when you pay through the app, it shows
processing continues and it remains for a long period of time, sometimes 2 to 3
days, because of a technical issue.
● Non-Credit of Money: It also happens when you pay to a merchant or any bank
account and the message displays ‘PAYMENT SUCCESSFUL'. Your account is
debited from the receiver's account, and sometimes the credit processing takes
more than 24 hours.
● REFUND OF CANCELLED TICKETS IS TRICKY: You can book travel tickets through
the PhonePe app. You can also cancel booked tickets through PhonePe, but the
ticket should be booked through the PhonePe app. The problem arises when
there is a refund issue for the canceled ticket.
● NO INTEREST ON YOUR WALLET DEPOSIT: PhonePe does not give you interest on
your wallet deposit; however, other UPI apps that have wallet facilities do not
give interest as well, but Paytm has another option of depositing money in a
payment savings account.
OPPORTUNITIES:
● GROWING DEMAND FOR AGGREGATORS: Aggregators and middlemen are in
demand everywhere today, and with growing technology usage, people prefer to
make most payments from the convenience of their homes.
● DEMONETISATION: One of the services that greatly benefited from the Indian
government's demonetization drive was online payment services, and Paytm was
one of the biggest beneficiaries.
● THE SURGE IN THE NUMBER OF WORKING PROFESSIONALS: The number of
working professionals is increasing profusely, which means that for most couples,
time is scarce, making them rely more on home delivery services for their
sustenance.
THREAT:
● Competition: With lower barriers to entry, every new entrepreneur is looking at
aggregating services. There are a lot of online portals like PayCall, Mobikwik, etc.,

9. and even telecom services like Airtel and Vodafone provide online payment
gateways.
● Growing Concerns About Safety: Today, there is negative imagery about
information security and tracking shopping habits. There are also growing
concerns about how safe the information submitted to payment portals is and the
level to which such portals or payments made through them are monitored.
Summary
In summary, PhonePe's remarkable journey from inception to its latest achievements in
2023 reflects a commitment to innovation and excellence in India's digital payment
landscape.
With strategic partnerships, diverse services, and a user-centric approach, PhonePe
continues to redefine the future of seamless digital transactions, making it a trusted
leader in the industry.
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