In the race to make Unified Payments Interface (UPI) a popular way to pay, PhonePe was the first to shoot right off the block when the whistle sounded. Within a week after the payment system was launched in August 2016, PhonePe was out with its app.

In these nine months, the young payments app has already come a full circle. An acquisition by Flipkart even before its product was out, a policy like demonetisation that tried to upend things for good, an ambush from unexpected competitors, and banks preying on the new at the slightest opportunity.

Practical lessons aside, post-demonetisation, PhonePe has managed to land on its feet. With 3.5 million transactions, it has a 38% share of the total UPI transactions in May. In December it saw 1.1 million transactions, says Sameer Nigam, founder and CEO of PhonePe. Meanwhile, its largest competitor, BHIM’s share of UPI transactions still holds the rein accounting for 42%. 

UPI is touted as a convenient way to send money between two people or as the industry calls it, between peer to peer. In what could give it new wings, The Ken learnt that ride-hailing apps Uber and Ola too are including UPI as a payment mode, in addition to wallets, cards and cash. Ola has already rolled this out to a few limited users. And Uber is working with Axis Bank to integrate it as a mode of payment within the app, said three sources close to the development.

But UPI’s merchant friendliness is unproven. For it to truly come up on the top as the go-to way of payment, it needs more merchants accepting it.

PhonePe is making overtures towards just that.

About 25% of 9.2 million UPI transactions in May was for paying online merchants

AP Hota, CEO, NPCI

By virtue of being attached to the hip to Flipkart, it has had the advantage of having an early exposure to online merchants. It lets people pay online on Myntra, Jabong and Flipkart, giving it instant access to over 75 million online shoppers. Today, 50% of its transactions come from these merchants, claims Nigam. That’s better than what UPI, on the whole, has managed to achieve as a payment system so far. About 25% of 9.2 million UPI transactions in May was for paying online merchants, said AP Hota, the CEO of National Payments Corporation of India, which runs UPI. He says most of it is coming from PhonePe today for things like mobile recharges.

Now, Nigam is taking the app to offline merchants. It’s an all important move for PhonePe if it wants to be of any real relevance.

AUTHOR

Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

View Full Profile

Available exclusively to subscribers of The Ken India

This story is a part of The Ken India edition. Subscribe. Questions?

MOST POPULAR

Annual Subscription

12-month access to 200+ stories, archive of 800+ stories from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 2,750

Subscribe
 

Quarterly Subscription

3-month access to 60+ new stories with 3-months worth of archives from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 1,750

Subscribe
 

Single Story

Instant access to this story for a year along with comment privileges.

Rs. 500

Subscribe
MOST POPULAR

Annual Subscription

12-month access to 150+ stories from Southeast Asia.

$ 120

Subscribe
 

Quarterly Subscription

3-month access to 35+ stories from Southeast Asia.

$ 50

Subscribe
 

Single Story

Instant access to this story for a year along with comment privileges.

$ 20

Subscribe

Questions?

What is The Ken?

The Ken is a subscription-only business journalism website and app that provides coverage across two editions - India and Southeast Asia.

What kind of stories do you write?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics.

We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

What do I get if I subscribe?

For subscribers of the India edition, we publish a new story every weekday, a premium daily newsletter, Beyond The First Order and a weekly newsletter - The Nutgraf.

For subscribers of the Southeast Asia edition, we publish a new story three days a week and a weekly newsletter, Strait Up.

The annual subscription will get you complete, exclusive access to our archive of previously published stories for your edition, along with access to our subscriber-only mobile apps, our premium comment sections, our newsletter archives and several other gifts and benefits.

Do I need to pay separately for your premium newsletters?

Nope. Paid, premium subscribers of The Ken get our newsletters delivered for free.

Does a subscription to the India edition grant me access to Southeast Asia stories? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

Do you offer an all-access joint subscription for both editions?

Not yet. If you’d like to access both editions, you’ll have to purchase two subscriptions separately - one for India and the other for Southeast Asia.

Do you offer any discounts?

No. We have a zero discounts policy.

Is there a free trial I can opt for?

We don’t offer any trials, but you can sign up for a free account which will give you access to the weekly free story, our archive of free stories and summaries of the paid stories. You can stay on the free account as long as you’d like.

Do you offer refunds?

We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Please write to us at [email protected] detailing the error or queries.