PhonePe to double user base, create 10K local jobs in rural India

Could you take us through some of the challenges faced by PhonePe, especially when the lockdown was imposed and how did the company deal with them?

The challenges of lockdown were multifold. It changed the needs and priorities of various customer segments. While the regular commerce slowed down, people were in dire need to meet their essential requirements around services like mobile recharges, grocery purchases, bill payments, etc. Then there was a need of the customers around safety and protection against any eventuality. 

Our product development methodology is conducive to independence and agility. Hence despite offices being shut, our teams have delivered at a rapid pace. We focused all our efforts towards meeting needs around essential commerce and launched multiple insurance products to protect individuals. A few examples of this include the launch of coronavirus insurance during this pandemic, the launch of hospital daily cover, store discovery for essentials with timings, the ability to pay and interact remotely, easing onboarding for customers who are new to digital payments etc. 

The National Payments Corporation of India (NPCI) has put a transaction cap which will be applicable from January 1, 2021, which mandates that no third-Party app providers (TPAPs) can exceed more than 30 per cent of the total volume of UPI transactions. This has largely impacted players like PhonePe. What is your response to this and how exactly the company is planning to face this challenge?

We have reviewed the recent NPCI circular and want to assure all our customers and merchants that there is absolutely no risk of any UPI transactions on PhonePe failing. In fact, NPCI’s circular categorically says that the 30 per cent market share cap does not apply to existing TPAPs like PhonePe until January 2023. PhonePe remains fully committed to ensuring that there is no customer disruption caused by this circular.

We would be interested in knowing the future roadmap of PhonePe for 2021 with respect to the adoption of cutting-edge technologies.

At PhonePe we strongly believe in our motto of “Karte Ja Badhte Ja” and on the same lines, we will continue to focus on developing the ecosystem and leading the digital payments revolution in India. We want every Indian citizen to be able to use digital payments and, in the quest, we are targeting to expand our merchant network to 25 million covering every pin code and every village of India. By the end of 2022, we want to expand our user base from 250 million to 500 million, so that every Indian is getting benefitted from technology.

This year we have launched multiple products in mutual funds and insurance. The idea is to make it simple and easy for customers so that they can get the benefits without worrying about complexities. In 2021, we want to be the most preferred destination for financial services because of the experience, transparency and innovations we offer.

There are lots of cutting-edge technologies which are using to serve customers at our scale with very high reliability. One of the most interesting aspects is utilising data intelligently and offering a personalised experience to customers who are new to digital payments as well as customers who have already adopted digital payments for most of their needs. In order to build an ecosystem that is accessible by every Indian, product design has a huge challenge to be able to solve all kinds of barriers – socio-economic, language and demographic.

In order to onboard the next 250 million users who will primarily come from India’s smaller towns and villages, we believe that it is necessary to design even simpler user interfaces with more intuitive design. This would essentially involve easier onboarding and account registration, predictable user flows that remove guesswork, localised and audio/visual instructions and how-to-use guides (in vernacular languages), hand-holding at critical junctures via timely recommendations (based on the past usage history) and machine learning-based hyper-personalization.  

Please share PhonePe’s strategy to further consolidate its presence in the rural parts of the country. What are your plans to deepen your roots in India in the coming months?

PhonePe has a pan-India presence and we have seen adoption across age groups, income levels and gender. Our registered user base of 250 million is spread across over 18,000 pin codes, covering over 95 per cent of India’s total pin codes. Also, 80 per cent of our users are from tier 2, 3, 4 and beyond. During the pandemic, we saw a 50 per cent rise in new users coming to PhonePe and 85 per cent of these new users were from small towns and rural areas.

Our goal is to expand our registered user base from 250 million to 500 million by December 2022. A significant chunk of these new users will come from non-metros and rural India. This will be done in conjunction with building out ubiquitous acceptance in the offline merchant network. Hence, we are working to enable digital payments for over 25 million small merchants across India in the next year. This will involve covering all the 5,500 Talukas across India via our merchant acquisition team and create 10,000 local jobs in semi-urban and rural areas. 

As the head of product management, what offerings are we going to see from PhonePe in the next few months in the midst of Covid-19?

When one is leading with an ecosystem approach, the right thing to do is to focus on expanding and developing the market and reach as many customers as possible. The core focus areas for the next few quarters will be the expansion of the merchant network and adding new and interesting offerings in various financial products in the wealth and insurance category. We will also be adding more merchants to our PhonePe Switch platform to enable seamless discovery and commerce. There are many other product features in the works that will go live over the next few months. We will be able to share more details once we launch these on our platform.