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The emphasis is on comfort and ease in today's world and the banking industry has seen quite a revolution in this matter. Carrying cash was rather cumbersome, which led to the birth of digital payments and mobile wallets and PhonePe has grown up to be one of the major exponents in this sector.
Mobile apps are the preferred method for the payment of groceries, utility bills, phone recharge, etc. Even large transactions are now done digitally rather than in cash, which has not only removed the risk factors in the physical world but also streamlined the whole banking and finance sector for good.
PhonePe is one such payment app that has made the lives of millions of Indians simple. Founded in December 2015, the Indian UPI-based app PhonePe has been acquired by Flipkart and its parent Walmart, a year later, after which it ushered in an era of growth and expansion for itself and never turned back. Flipkart currently owns 87% of PhonePe's stakes while its parent owns another 10% of them, while the remaining stakes are held by the minority shareholders of Flipkart.
PhonePe is currently hailed as the market leader in the digital payments space of India. The app allows users to maintain their bank accounts digitally, access them at their convenience, and use their funds for all the purposes that they want. They can easily link their credit cards and debit cards with a mobile wallet to make their digital payments. Furthermore, instant money transfers can also be done through PhonePe. These are only some instances when PhonePe appears to be indispensable and trust us, there are more!
PhonePe, which is currently headquartered in Singapore, will bring its headquarters to India, as per reports dated July 20, 2022. If you need to know more about PhonePe's Success Story, Founders and Team, Competitors, Business Model, Revenue Model, Funding and Investors, and more, then stay glued.
PhonePe - Company Highlights
- Company Name-PhonePe
- Founders-Sameer Nigam, Burzin Engineer, and Rahul Chari
- Founded -December 2015
- Valuation-$5.5 Billion (2021)
- Revenues-$92.85 mn (FY21)
- Funding-$1.99 bn (April 2022)
- Parent Organization-Flipkart
PhonePe - About | How does PhonePe Work?
PhonePe is a digital payments company founded in December 2015 that is built to support over 11 languages. It is one of the first payment apps to be built on the Unified Payments Interface (UPI) and is also hailed as the first UPI payments app to cross the billion-transaction mark. The app allows its users to receive and send money, check bank balances, make POS payments, buy gold, and perform a range of transactions through its app including phone recharge, DTH payments, electricity, gas, and other bill payments. Furthermore, PhonePe is one of the most common UPI apps that is approved by a majority of the Indian merchants, which allows the users to book rides, order food, buy things, and more online.
PhonePe has received its legal sanction from RBI to operate as an account aggregator. This will authorize PhonePe to share financial data freely with the Financial Information Users (FIUs) and Financial Information Providers (FIPs). However, the leading digital payments app and merchant aggregator platform will need prior consent from its customers before it shares any data.
PhonePe is headquartered in Singapore for quite some time now, however, it will bring its registered entity to India, as revealed by a PhonePe spokesperson on July 20, 2022. Flipkart, which holds the largest shares of PhonePe, however, would keep its headquarters in Singapore, and has no plans of shifting it.
How does PhonePe Work?
PhonePe is a digital payments and wallet-based payments app that operates in the UPI fintech industry. All we need to do is to download PhonePe on our mobiles, link our phone numbers and our bank accounts, and once these are verified, we can start making our transactions over the app. The PhonePe transactions are directly linked with the respective bank accounts. Also, the PhonePe wallet need not be recharged again because it is also linked with the bank account.
PhonePe - Industry
Digital payment transactions have been witnessing a growth of around 76% in just the past 12 months, which includes a host of first-time digital payment users. The industry of digital payments in India is reported to be growing to around $700 billion by 2022. In this large Indian industry of digital payment that has a huge potential for growth ahead, PhonePe operates as a market leader with a market share of 46.3% while Google Pay is trailing with a market share of 36.4%, as reported on December 7, 2021.
PhonePe - Founders And Team
Sameer Nigam, Burzin Engineer, and Rahul Chari are the founders of PhonePe.
Sameer Nigam is the Founder and CEO of PhonePe. He served as the Senior Vice President, Engineering of Flipkart. Nigam was a student at the University of Mumbai and has completed his MBA from "The Wharton School".
Rahul Chari is the Founder and CTO at PhonePe. He started his career as a software engineer with Andiamo Systems Inc after completing an internship at Sun Microsystems. Chari then went on to serve in managerial positions in a couple more companies like Cisco Systems, Mime360, and Flipkart where he served as the Senior Software Engineer, Manager, Co-founder and CTO, and Vice President of Engineering.
Burzin Engineer is the CRO of PhonePe. He was the Vice President of Engineering and Operations at M-GO for 2 years before founding PhonePe. Furthermore, he has also worked with Flipkart, where he was a Director of Engineering, mime360.com, and Shopzilla.com. Engineer pursued his degree from the University of Mumbai and later completed a Master's degree in Computer Science from the University of Southern California.
PhonePe currently has around 3.5K employees from across the country.
PhonePe - Startup Story
PhonePe was started up by ex-Flipkart employees - Sameer Nigam, Rahul Chari, and Burzin Engineer in 2015. It was an app that had a huge growth potential, and this was immediately realized by Flipkart, who grabbed this opportunity to acquire the same the very next year, thereby returning the brainchild of the ex-Flipkart employees to its parent, Flipkart.
PhonePe - Mission and Vision
PhonePe was founded with a mission to stand as a universal, seamless, and safe mobile payments ecosystem. The vision statement of PhonePe reads, "To build a large, scalable & open transaction ecosystem that creates the maximum positive impact for all stakeholders."
PhonePe - Name, Tagline and Logo
The name of PhonePe sounds quite similar to its peers Google Pay, Paytm, Amazon Pay, and more because it is essentially a payments app. However, PhonePe has an interesting take on the word "pay." PhonePe writes it as "Pe," thereby evoking the Hindi connotation of the term, making "PhonePe" sound as "on the phone," which is equally apt because PhonePe is an app that operates through mobile phones!
PhonePe chose purple to be the primary color and worked out the logo using the Hindi font to write "Pe", which quickly helps its users recall the Hindi connotation of their brand name.
PhonePe goes by the tagline "Karte Ja. Badhte Ja," which means "Keep doing, keep growing" written on a very positive note that hints toward the transactions on the app and the expansion of the business of PhonePe.
PhonePe - Business Model
PhonePe is a UPI-based payment platform. The app enables the transfer of money from one bank to another. It has other features as well. Through its mobile app, PhonePe sells products and some services like groceries, insurance, food, etc. The company's job is to promote the products. PhonePe can be used for mobile recharge. Electricity bills and gas bills can also be paid via PhonePe. PhonePe launched a POS machine that is now seen in almost every shop and Kirana store in India. People can use the POS system to make payments.
PhonePe is now officially an insurance brokerage firm. The digital payments and merchant aggregator was handed over the license for insurance broking by the Insurance Regulatory and Development Authority of India (IRDAI). PhonePe will now be able to offer insurance products to its customers from a variety of insurance firms. Furthermore, it can also offer personalized insurance products to its enormous userbase.
PhonePe - Revenue Model
PhonePe gets its commission from the promotion of various products on its app. It also collects revenue from a partner through the 'Switch' platform. Recharge points/centers usually earn a commission from the telecom companies when the customers recharge their phones. Likewise, PhonePe also receives a commission when the users recharge their phones through the app. The company earns a commission from any online purchase users make via its app. PhonePe has a humongous user database. In today's date, data holds the key to profit. The database offers several valuable insights. The payment patterns of customers are determined by how much money they transfer and when. Moreover, one can deduce a customer's purchasing pattern along with the retailer's or store's details. PhonePe continues to grow its customer base through promotions and other offers on its app.
The leading digital payments platform has announced that it will be charging up to Rs 2 worth of processing fees against all the mobile recharges made over its digital app, as of the reports dated October 23, 2021. Though PhonePe is currently operating a "small scale experiment", as termed by the Fintech giant, and is still not a full-fledged rollout, it has planned to charge Re 1 for any recharges between Rs 50-100 and Rs 2 for any recharges above Rs 100. However, the recharges below Rs 50 are still deemed to be free. As part of the experiment, it has been noted that most of the users are either not paying anything or paying only Re 1.
PhonePe is the first player in the digital payments space to introduce the concept of processing fees and this has reportedly bothered many users across the country, who have aired their concerns via tweets and on other social media platforms and might also call PhonePe quits. PhonePe rival Paytm also did not support this concept of charging the customers and has been reported as saying, “Trust build karna bhi ek process hai. Iss process ki koi keemat nahi.”
PhonePe - Startup Challenges
Starting up was a big challenge indeed for PhonePe because the industry was quite new and rather unexplored. However, the PhonePe acquisition by Flipkart was something that settled things.
PhonePe was blocked on January 14, 2017, by ICICI bank because the PhonePe transactions did not meet the NPCI guidelines. Though NPCI initially instructed ICICI to allow UPI transactions via PhonePe on January 19, 2017, the regulatory body, confirmed a day later that the digital payments service provider had indeed violated the UPI norms. Airtel was another company that blocked PhonePe transactions on its platforms during the same period.
This led PhonePe to close its operations on Flipkart's website, which helped the startup to align itself with the terms stated in the updated verdict from NPCI. The digital payments app resolved all of these issues with ICICI and Airtel by February 2017.
PhonePe QR Codes were Burnt by Paytm Employees
PhonePe filed a police complaint against the Paytm employees who allegedly burnt PhonePe QR codes. This incident took place in Greater Noida and the complaint was lodged at Surajpur Lakhnawali police station. A video of the PhonePe QR codes' pile was the first thing that the PhonePe officials saw based on which it filed a complaint, as of August 1, 2022.
Responding to this, a Paytm spokesperson has revealed that upon identification of the 3 employees of Paytm, which includes a Paytm Area Sales Manager (ASM) and a former PhonePe employee, they have already been suspended. The Paytm spokesperson further mentioned that Paytm doesn't tolerate "any kind of misconduct and always stands by the highest standards of work ethics".
PhonePe - Funding And Investors
PhonePe has collected $1.99 billion in funding to date over 14 rounds. The company received a fresh infusion of $297 mn from PhonePe Private Limited Singapore, its Singapore-based company on April 15, 2022. PhonePe concluded the last funding round worth $350 million from Walmart, which was an extension of the $700 million that was announced in December 2020.
PhonePe - Acquisitions
PhonePe has acquired 5 companies till now - Indus App Bazaar, Zopper, GigIndia, OpenQ, WealthDesk. The Walmart-backed company acquired OpenQ and WealthDesk in a combined deal worth $75 mn, as far as the reports dated May 18, 2022, go. Bloomberg had earlier reported that WealthDesk will be acquired for around $50 mn, while the OpenQ's acquisition would be completed in a deal worth $25 mn. Both the organisations will continue to work independently even after the acquisition, as asserted by the deal, where both the founders and the teams would join PhonePe.
The previous acquisition was that of GigIndia, which came in on March 22, 2022. Indus App Bazaar was the company that PhonePe set to acquire on May 19, 2021, in a deal valued at $60 mn. However, it wasn't completed then because of the objection from the existing investor Affle. The acquisition of Indus' parent, OSLabs was finally announced by PhonePe on July 29, 2022, when the fintech giant announced that the three affected parties - PhonePe, OSLabs, and Affle Global have reached “an amicable settlement in the matter", followed by the confirmation that PhonePe will acquire Affle’s entire stake at a premium, which was valued around $65 mn.
PhonePe - ESOPs
PhonePe has announced an ESOP buyback of around Rs 135 crores. The liquidity event, as reported on November 19, 2021, will allow the leadership of the company to sell 10% of its vested stock options. On the other hand, the current employees can sell up to 25% of their vested options. However, it has already been disclosed that the PhonePe founders would not take part in this buyback.
PhonePe - Partnerships
PhonePe has seen too many partnerships already in the 7 years that it has been operating. Here's diving into some of the most important ones:
PhonePe has partnered with Axis bank on July 2, 2021, on the UPI multi-bank model. It has already earlier collaborated with Yes Bank
Ola collaborated with PhonePe on July 7, 2020, to allow Ola payments through the PhonePe app and wallet
PhonePe has partnered with Flipkart to digitize the cash-on-delivery payments on July 6, 2021
PhonePe became the official payments partner for KBFC on September 10, 2021
Edelweiss General Insurance tied up with PhonePe on December 20, 2021, with an aim to offer digital motor insurance products
PhonePe - Competitors
The top competitors of PhonePe are Google Pay, Amazon Pay, Whatsapp Pay, Juspay, PCKT, Paytm, MobiKwik, BharatPe, Roomeo, and mobilPay.
GPay is a Google-developed digital wallet platform and online payment service. Released in 2011 initially, GooglePay offers contactless payment options.
Amazon Pay was founded in 2007, and serves as an online payments processing service owned by Amazon, headquartered in Seattle.
Whatsapp Pay is a payments service provider powered by the social media giant Facebook, which owns Whatsapp, to help users send and receive money while chatting.
Juspay is an online platform used for mobile-based payments. Juspay was founded in 2012.
PCKT is a fintech company. It provides payment services to consumers. PCKT was founded in the year 2003.
Paytm is a pioneer of the Indian e-commerce payment system. It is a financial technology company. Paytm was founded in the year 2010.
MobiKwik is an Indian company. It has a mobile phone-based payment system. MobiKwik was founded in the year 2009.
BharatPe is a platform, particularly for retailers and businesses. It is a QR-based payment app. The company was founded in the year 2016.
Roomeo is a popular payments platform. It offers a fintech mobile app. Roomeo was founded in the year 2011.
MobilPay provides mobile marketing and payment services. MobilPay was founded in the year 2010.
PhonePe - Growth
PhonePe was founded in December 2015. In 2016, Flipkart acquired PhonePe. The app which was acquired by Flipkart at a valuation between $10 and $20 million in 2016, has posted a valuation of over $5.5 billion in the end of 2021. This directly speaks of the growth of the company.
In 2017, PhonePe became the 1st UPI-based app to cross 10 million downloads. It consistently ranks among the top finance apps on Apple's App Store and Google Play Store. PhonePe gradually became the biggest driver of UPI transactions in India. In the year 2017, it hit the milestone of 1 million app transactions in a day. In 2018, PhonePe launched 'micro apps' on its platform.
The company has been hailed as the most popular digital payments service provider and has further recorded $2 billion monthly transactions in October 2021, as per the reports of November 17, 2021. PhonePe was also known as the second-largest valued consumer-facing fintech startup, valued anywhere between $5.5-5.7 bn after Paytm, which was then valued at around $16 bn after its private funding round.
In the year 2019, PhonePe was one of the winners when it came to growth. PhonePe dominated the year with 857.22% growth. All of the leading payment apps grew by 88% from the year 2018.
PhonePe Transaction Report
PhonePe has many set records concerning its transactions and the growth that the company has seen in it. PhonePe is hailed as the first UPI player to reach 1 billion, 1.5 billion and now 2 billion transactions respectively. PhonePe has been the market leader in many respects like volume and value of transactions, market share, registered users and more, in the market of the UPI apps.
PhonePe had set new records in the month of July 2021, with its total transactions clocking close to the 1.5 billion mark, Google Pay, on the other hand, crosses the 1 billion mark for the first time. As per the month of June 2021, PhonePe held a 46% share in the UPI ecosystem as compared to Google Pay's 34.6% share. In the month of July, the market share of PhonePe was recorded at 45.94% while Google Pay recorded its market share at 34.45% in the UPI ecosystem.
PhonePe was already leading its rival, Google Pay in terms of the market share. The former touched new skies when the National Payments Corporation of India came out with the records of the total number of transactions in June. According to the data published by the authority, PhonePe recorded 1292.71 million transactions, which amounted to 262,565.88 crores whereas Google Pay trailed with 972.26 million transactions worth Rs 207,287.73 crores in the month of June 2021. In October, PhonePe achieved another milestone when it crossed 2 bn transactions in 2021.
PhonePe Smart Speaker
PhonePe launched Smart Speaker officially after the QR code burning incident by Paytm employees. The PhonePe Smart Speaker has been launched to track the payments at stores reliably and conveniently. These speakers have already been launched in 8+ cities of India and over 100K devices have been installed to be used by the PhonePe merchants, as of August 2022.
The PhonePe Smart Speakers provide payment notifications in over 11 Indian languages. These come with up to 4 days of battery life, and are installed at the doorstep of the merchants at just Rs 50 as an initial cost and a low monthly rental cost of Rs 50/month.
PhonePe successfully scaled up its revenue from operations by 85.5% to Rs 690 crores in FY21, which was recorded at Rs 372 crores in the last fiscal, as per the reports dated October 15, 2021. The payment services of the platform and other allied services helped the Bengaluru-based digital payments major bring home most of its revenue. The leading payments firm also collected around Rs 3.85 crores from its insurance business, which was another prominent revenue driver.
When it comes to losses, PhonePe maintained stable losses at Rs 1728 crores during FY21. However, the EBITDA margin of the company slightly improved to -219.9%.
PhonePe - Future Plans
The company has plans to become more profitable by 2022. PhonePe is also helping its users discover several new products online. It is informing people when, where, and which shops are open and delivering such products. This is a unique offering. PhonePe has launched a new chat service for users and merchants it deals with. The payments platform is on track to achieve something extraordinary in the next 2 years.
Who is the owner of PhonePe?
PhonePe is owned by Flipkart and Walmart.
Who are the Co-founders of Phonepe?
PhonePe was founded by Sameer Nigam, Rahul Chari, and Burzin Engineer.
Who is Burzin Engineer in Phonepe?
Burzin Engineer is the Founder and CRO (Chief Reliability Officer) at PhonePe. He was previously an Engineering Director at Flipkart.
What is Phonepe switch?
Phone pe switch is PhonePe's function that enables its users to switch between PhonePe and several apps of their choice, where they can get access to food, transport, ecommerce, and more.
What are Phonepe partners?
PhonePe has partnered with numerous apps and companies till date. It has collaborated with over 300 companies like Ola, Redbus, eat.fit, Swiggy, Blinkit and more, just to integrate their PWAs (progressive web apps) to its Switch platform.
What is the Phonepe valuation 2022?
PhonePe is valued somewhat at around $5.5 bn in 2022. The Walmart-backed company was last valued at $5.5 bn when recorded in December 2021.
What is the PhonePe revenue in 2021?
PhonePe witnessed an 85.5% jump in its revenues, which became Rs 690 cr in FY21, and was last recorded at Rs 372 cr in FY20.
How many Phonepe users did the app register?
PhonePe users have crossed the 350 million mark, as of January 2022.
Does PhonePe charge anything from the customers for the transactions?
Transaction over PhonePe is absolutely free for the customers. No matter how much the amount is that you want to transfer through the PhonePe app, you would be able to do it without any additional costs.
Do you need an IFSC code for sending money through PhonePe?
With the help of PhonePe, you can transfer money to the persons with their phone numbers associated with the PhonePe account, i.e., through their mobile phone numbers. You can send money to their bank accounts through their UPI id or via scanning the QR code. Furthermore, you can also send your money through to their bank accounts with the recipients' banking details like their Name, A/c number, and IFSC code.