PhonePe

In today's society, comfort and convenience are paramount, and the banking
business has seen a significant transformation in this regard. Carrying currency
was inconvenient, which led to the development of digital payments and mobile
wallets, of which PhonePe has become one of the leading proponents. Groceries,
energy bills, phone recharges, and other transactions are all done using mobile
apps. Even major transactions are now done digitally rather than in cash, which
has not only eliminated danger in the physical world but also streamlined the
entire banking and finance sector.

Vision – “To build a large, scalable & open transaction ecosystem that creates
the maximum positive impact for all stakeholders”

Mission – Over the next decade, digital payments are going to become more
accessible to the next billion users. The goal of PhonePe is to facilitate this change
by building payment solutions for this user base.

The Journey - In December of 2015, PhonePe was founded. Flipkart purchased

PhonePe in 2016. That year, the app became live. PhonePe was the first UPI-
based app to reach 10 million downloads in 2017. On both the Apple App Store
and the Google Play Store, it consistently ranks among the top finance apps.
PhonePe grew to become India's leading provider of UPI transactions. It reached a
milestone of 1 million app transactions per day in 2017. PhonePe introduced
'micro apps' to its platform in 2018. PhonePe was named one of the top 10 most
trafficked platforms by Comscore and won the 'Best Mobile Payment Product or
Service' award at the 9th IAMAI India Digital Awards in 2019. By 2020, it has
surpassed 250 million registered users, with a market-leading share of over 40%
in UPI transactions. It now has a total of 10 lakh outlets in 300 cities.

4Ps of PhonePe
Product - PhonePe is a digital payments platform that supports over 11
languages and was launched in December 2015. It's the first payment app to use
the Unified Payments Interface (UPI). Users can use the app to receive and send
money, check bank balances, make POS payments, acquire gold, and complete a
variety of activities such as phone recharges, DTH payments, electricity, gas, and
other bill payments. Furthermore, PhonePe is a popular UPI app that is accepted
by the majority of Indian retailers and allows users to book rides, order food,
make purchases, and more all over the internet.

Price - PhonePe is a completely free service that allows customers to pay for
other services they use. PhonePe makes money by promoting a variety of
products through their app. It gives discounts and offers to promote various apps
such as Ola, Jupiter, Ludo supreme Gold etc. It also collects income from the
'Switch' platform. When customers recharge their phones, the telecom firms
normally pay a commission to the recharge points/centers. Money deposited in
the wallet also generates income through interest.

Place – PhonePe is headquartered in Bangalore and like any other software or

website, can be accessed from anywhere using an internet-connected
smartphone or laptop. Users may use PhonePe to send and receive money,
recharge mobile phones, DTH, data cards, pay utility bills, pay for groceries, invest
in tax-saving funds, liquid funds, buy insurance, mutual funds, and gold, and buy
insurance, mutual funds, and gold. PhonePe is accepted at many Kiranas across
the country, and the business has assembled a 50,000-strong field force to
support its merchant acceptance network. According to the company, there is still
a lot of room to grow digital payments in brick-and-mortar establishments.

Promotion – PhonePe has been actively marketing through campaigns such as

sponsoring six deals for IPL franchises – Mumbai Indians, Chennai Super Kings,
Royal Challengers Bangalore, & Delhi Capital. It further will also partner with
Disney + Hotstar as an Associate Sponsor of IPL season 14. Featuring a friendly,
engaging style of delivery, PhonePe devised an episodic video series with a
character from TVC films, in which he shed light on several concerns.

Value Proposition – With over 18.5 million users, PhonePe is for everyone,
from the smallest towns to the major metros. The tagline "Karte ja, Badhte ja"
emphasises that PhonePe wants its users to have better lives while working hard,
from buying food to mailing money, paying bills, and so on. For e.g. John from
Tamil Nadu, buys 1gm of gold every quarter, from the comfort of his home. Three
clicks and thirty seconds is all that it takes him to complete his transaction.
Ease of Use – The User Interface is the most important feature of any app.
People are attracted more towards the quick ease of use features such as
PhonePe icons are spaciously placed so it is visible and doesn’t look concentrated,
the fonts used by the PhonePe are bigger than other payments apps & every
feature is visible and accessed from a single page through PhonePe’s app.
PhonePe has a very smooth way of installing and registering through the app, in
just 2 steps you become a user of the app.

Search optimization - PhonePe has garnered a lot of visibility through the

different app stores and using SEO techniques has placed itself amongst the top 5
apps when searched with keyword such as “PhonePe”, “UPI”, “Payment”,
“Phone” etc.

What are is doing Better?

All-in-One Solution
PhonePe is a single app that also offers a variety of other services on its platform.
With the SWITCH option, we can quickly and easily access our favorite apps and
services such as Domino's, Olacabs, Grofers, IRCTC, OYO Hotels, and others.

Intuitive POS
With the introduction of its POS System, now merchants will find the app useful
for their businesses as well. Also, Buyers now no longer must wait in line to pay
for their purchases at the cash register, and at the same time sellers can also
serve more customers at once.

Amount Management
With the Autopay section of Phone Pay, you can set all utility bill payments, such
as electricity, postpaid mobile bill, landline bill, insurance premium, water tax,
house tax, and so on.
You can also set a payment reminder for a more convenient utility bill payment.
One of the finest features of it is that it will keep on reminding you to pay the bill
exactly on the due date, which in a way helps in managing our accounts in an
efficient way.

User friendly Interface

PhonePe is one of the best digital payment apps with better user-friendly
interface support compared to the other apps, also the app supports multiple
regional languages. This improves the app's usability and ease of use for all native
speakers of those languages. Bill payments, recharges and money transfers made
easy. Lastly with the use of Phone pee we can experience quick and hassle-free
transactions with an exceptionally low transaction failure rate.

Segmentation Targeting Positioning

Segmentation
Geographic
Tier 1, Tier 2, Tier 3 Cities
Demographic
Age group of Below 18, 18-60, Above 60 years
Psychographic
People who believe in modern approaches and enjoy experiencing ease of
transactions, such as no long lines for bill payments, quick phone recharge etc.

Targeting
All Tier Cities
Age Group: 18-60 years
Young minds looking for a change in payment method
Partner apps for online transactions (e.g., Zomato, Flipkart, Big Basket etc.)
Vendors- Looking for quick transactions (Auto rickshaws, fruit & Vegetable
Vendors etc.)
Positioning
Fast & Simple User Interface
Direct Bank to Bank Transfer (Hassle free & quick Transactions)
Safer than others (Face unlock, finger scan, passcode)
Fun to use
In the STP Analysis, what we can see is that PhonePe has segmented itself into 3
segments, first based on various tiers of cities, secondly it has segmented itself for
the various age group of people, and last segment are those who hold a mindset
of conventional thinking and who are open to change.
Based on this segmentation, now whom PhonePe are targeting to, they are
targeting all the vendors, business merchants, individuals of age group between
18-60 of various cities.
Also, online transaction partners such as Zomato, swiggy etc are one of the
important targets of PhonePe
Now how is PhonePe making a right spot-on consumers' mind, they are doing so
by placing themselves as a platform that supports quick and hassle-free
transactions, a triple high-level security, and a platform with a very efficient and
friendly User interface.

Improvements
First would be the improvement in data security, as data is regarded as the new
gold so PhonePe must keep on improving its data policies with time
Lower dependency on banks can make them more efficient as it will result in
reducing the shortcomings the effects of bank server failures.
Improved User Interface and in-app segmentation
What PhonePe can do to improve its efficiency in its application is by bringing in
the use of technologies such as AI and ML to make it customized to all users
Lastly, Incorporation of a Robust refund policies
You can book travel tickets through PhonePe app. Also, you can cancel booked
tickets through PhonePe. The problem arises when there is a refund issue of the
cancelled ticket. When you cancel the ticket, after deducting the charges the rest
of the credits are in your account. But if the trip is cancelled by the service
provider, then you will not get a refund.
So, Phone pee must bring in a robust refund policy that can resolve this type of
issue.

SITUATIONAL ANALYSIS
Company
Even before it’s launch in 2016, flipkart acquired Phonepe. It has been constantly
funding phonepe along with wallmart. It aimed at providing unified payment
interface to the mobile users that can be directly linked to debit card, credit card
and bank account of the customer.
In 2017 it crossed 10mn downloads and became #1 finance app on apple store
and google store. The name of PhonePe sounds quite similar to its peers Google
Pay, Paytm, Amazon Pay, and more because it is essential 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!

Customers
Currently the app is mainly used in T1 and T2 cities so it aims to touch 19100
pincodes across the country.

Collaborators
Phonepe’s switch platform helps customer to order their favourite food and
groceries booking a hotel or flight from the app itself. Switch platform has more
than 100 partners app that aims customer convenience.
In 2018, phonepe entered strategic partnership with freecharge that enabled it’s
45mn users to link their existing freecharge wallets to phonepe app.
Phonepe has also partnered with Kerala blasters, India’s leading football club and
as a part of partnership phonepe’s logo would be seen on the back of official KBFC
jersey.

Competitors
In 2021 phonepe’s market share was 46% in UPI while its highest competitor Gpay
had 34.6% and paytm has 13%

Climate
Phonepe has better interface than paytm as it has bigger font. It also has icons on
the mainscreen because of which transactions happen with minimum clicks.
It was launched when demonitisation was announced, basically when customers
needed to transact so they switched to new platform.
After free jio sims the internet became a commodity in rural areas and people are
now switching to digital payments.
Also after the pandemic there is a shift in the way consumers approach digital
payments because of it’s contactless nature.

Revenue Model
Revenue Model: Majority of the company's revenue has come from payments
and associated services. PhonePe claims to have a 45 per cent market share in
digital payments, and a 300 million user base.
PhonePe gets its commission from the promotion of various products on its app.
It also collects revenue from the partners through the 'Switch' platform. PhonePe
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. By charging merchants a commission on every sale through PhonePe
UPI/Wallet it earns revenues
Some examples include:
  Utility bill payments (gas, electricity and water)
 DTH recharge
 Selling Insurance
 Selling Gold
 Mutual funds
 Bus, train and flight reservations

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. PhonePe
has plans to becoming profitable by 2022 and will file for an IPO in 2023.It also
Aims to reach 500Million customers The company aims to reach 500 million
customers and is heading steadily towards that goal. PhonePe’s focus will also be
on getting customers engaged in multiple categories. This was the statement
made by its CEO in Sept 2021
According to data released by the National Payments Corporation of India (NPCI),
PhonePe has registered 1937.57 million transactions worth Rs 3,65,845.39 crore
in October as compared to Google Pay’s 1451.93 million amounting to Rs
2,87,491.46 crore.
PhonePe has announced an ESOP buyback of around Rs 135 crores. The liquidity
event, taken place on November 2021, will allow the leadership of the company
to sell 10% of its vested stock options.
Predicting future
Flipkart has been constantly funding PhonePe with Walmart joining the firm on
one occasion.
Due to COVID-19 the trend of online traction really took off and now people have
gotten very comfortable and used to with this method. PhonePe acquiring the
highest market share in this segment around 45% will continue to have a
profitable future.
PhonePe has been able to dominate the UPI ecosystem as it aggressively focuses
on merchant payments, especially small businesses and have acquired a good
market in the lower strata and performed well as compared to its competitors
In 2023 PhonePe has plans to launch its IPO which can be a profit generating
mechanism for it.