‘PhonePe saw 925 mn transactions with 50% increase in user acquisition’
Sonika Chandra, VP, Business Development & Strategic Partnerships, PhonePe, shares more on the growing digital payments infrastructure, PhonePe’s Switch platform & on the ongoing festive season
The resumption of economic activities along with festive chatter has turned out to be the success ladder for UPI payments infrastructure in surpassing 2 billion transactions in the last month, i.e, October. Digital payment has been experiencing an exponential growth since ‘Digital India’ initiative by the government and the graph has substantially extrapolated since the lockdown and social distancing scenarios.
Majority of UPI transactions have been driven by leading players like PhonePe.
PhonePe reportedly recorded 925 million transactions in October and has surpassed the pre-lockdown figures by a huge margin.
Walmart’s PhonePe has seen this upsurge in its transactions as more and more offline shops, retailers, merchants and customers have opted for digital alternatives for payments to not let their businesses be restricted by lockdown blues. The association with IPL and growth of fantasy sports applications have also been major reasons for PhonePe’s growth. It has more than 250 million registered users today with the app widening the scope of its services including finances, insurance and digital wallet.
The “Switch” platform which gives merchant partners the ability to integrate their existing PWAs (progressive web apps) or mobile-sites to the PhonePe platform, and instantly reach out to over 250 million registered PhonePe users has worked positively for the payments app. PhonePe Switch enables faster customer acquisition at lower costs and drives higher engagement for its partners.
In a chat with exchange4media Sonika Chandra, VP-Business Development & Strategic Partnerships, PhonePe, spoke on the growth in online transactions, PhonePe’s ‘Switch’ platform, digital campaigns, safeguarding customers' trust in digital payments, festive season investments and more.
How have the past Covid-hit months affected your business? What have been the major learnings for the digital payments app?
We have seen significant uptick for digital payments throughout the COVID period. Our new user acquisition numbers have increased by 50% and it is heartening to see digital payments being adopted by users across age groups, income levels, and locations. Furthermore, we hit a record high in October in terms of our daily user activity as well as the total payment volume processed via our platform. Our monthly transaction volume for October stood at 925 million transactions and has surpassed the pre-lockdown figures by a huge margin. In fact, we became the market leader in UPI transactions in October. This is driven by continued user adoption of PhonePe across core use cases such as person-to-person payments, recharges and bill payments as well as the opening up of offline & online merchants across the country.
The major learnings have been around adapting our offerings for customers in light of the pandemic. For instance, despite the lockdown, we were able to bring new offerings to the market with the same cadence as in the beginning of the year. This was especially evident in the insurance category where we launched 6 products within 6 months. Given the fast spread of the virus, we prioritized the launch of affordable COVID-19 insurance products over other types of insurance. Another example is when the demand for groceries and other essentials was at its peak during the lockdown period, we innovated to launch new features on our Stores page to let customers order and pay contactlessly.
With amplified digital outreach, how has PhonePe leveraged the scenario?
COVID-19 has certainly provided a push to digital transactions across the country. During the lockdown, we saw a massive spike in use cases like money transfers, recharges, bill payments as well as payments made for buying essentials like food, grocery, medicines, online doctor consultations etc. In an interesting trend, we saw users recharging and paying bills not just for themselves, but also for multiple family members who are not digitally savvy.
We have launched several products in the insurance and mutual funds categories in the last 8 months. In the Mutual Funds segment, we launched Liquid Funds and Super Funds to help build long term wealth for our users. In the Insurance category, we scaled up fast and launched 6 insurance products in the last 6 months. The response from the market for our insurance products has been amazing. We have also become the fastest-growing insurtech platform after having sold over 5 lakh insurance policies within a short span of 5 months.
During the lockdown, we introduced multiple innovative features to help both businesses and our customers. We added filters like “currently operational” and “home delivery” to our Stores page and a "Pay Now" feature which enables customers to make payment remotely using the PhonePe app without the need for scanning any QR. Since the launch of these features, we have seen a three-fold increase in activity and a 50% rise in daily traffic on the ‘Stores’ page.
What growth has been observed in terms of digital payments in the pre-Covid and Covid times?
From PhonePe’s perspective, the transaction volume on our platform was back to normal (pre-COVID levels) in June this year. October was our biggest month ever when we processed 925 million transactions on the app. Today, we are India’s leading digital payments platform with over 250 million registered users. One in five Indians is a PhonePe user. Our registered user base of 250 Mn is spread across 18,000+ pin codes, covering over 95% of India’s total pin codes. Also, 80% of our users are from tier-2, 3, 4 and beyond. We are also the market leader in UPI transactions with over 40% share in the volume of transactions. Our annual total payment volume is in excess of $277 billion as of October 2020. We are accepted by 13 million merchants across 500 cities in India.
From an ecosystem perspective, the digital financial inclusion journey of India has definitely gathered momentum post COVID-19. The Indian digital payments ecosystem has been able to cover a lot of ground in the last 8 months. Given the enhanced awareness around going digital during COVID-19, we are seeing a fundamental shift in the way consumers perceive contactless payments. This is expected to continue in the foreseeable future as well.
Is the technological infrastructure adapted enough for a country like India to switch to digital payments?
We have come a long way since the launch of UPI over 4 years ago. The digital payments infrastructure has improved significantly and as a result, not just PhonePe, but the entire payments ecosystem has grown manifold. NPCI, RBI and the Govt of India have done a lot to push the adoption of digital payments across the country. Furthermore, we do believe that further investments are needed at an ecosystem level to build the technology infrastructure keeping the future needs in mind.
What has PhonePe as a brand done to guard the trust of its users in regards to making digital payments in the era of social distancing?
As a transaction platform, the most important thing for us is to earn and retain a customer’s trust. Building awareness among first-time users and earning their trust are critical to further growth. Being one of the largest players in the digital payment ecosystem, we have undertaken a massive user awareness exercise to highlight the safety of digital payments as well as the ease of using digital payments for everyday use cases like money transfers, recharges, bill payments, and payments at offline stores/kiranas.
We have also invested in building deep technology in the area of fraud detection. We score every transaction in real-time for authenticity before allowing the user to authorize the same. We also invest in real-time analysis of mobile numbers, devices, cards or bank accounts for patterns of abnormal behavior. Our data models flag entities as high risk resulting in their immediate blocking until they can be reviewed systemically. Our constant endeavor is to fine tune these models and reduce the blocked transactions to provide maximum accuracy.
Elaborate on the ‘Switch Platform’ updated in the app. What benefits does it offer to your users?
PhonePe Switch was launched in March 2018. We have over 260 apps live on the platform currently. It allows our customers to seamlessly switch between PhonePe and their favourite food, grocery, shopping, travel and other categories of apps from within the PhonePe app itself, with just a single tap. They don’t need to download these apps separately on their phones. Additionally, over the last few years, it has been instrumental in helping our merchant partners acquire millions of new customers. It helps partners acquire high-quality users at low costs driving greater engagement and helps them grow their business.
PhonePe’s ad starring Aamir Khan and Alia Bhatt managed to cut through the clutter in the lull led by the pandemic and garnered a whooping number of views. How did the brand manage to pack the perfect punch?
Our brand campaign has been a reflection of everyday stories of progress with PhonePe with Aamir Khan and Alia Bhatt. The objective behind running the brand campaign during IPL was to reach a massive audience that has not yet gone digital for payments. The key focus was to remind the audience that PhonePe stands at the vanguard of safe, easy and instant digital payments and financial services to help each and every Indian progress - more relevant than ever in the face of this pandemic. The campaign has been well received by all consumer cohorts - users and non-users alike, with the ads garnering over 425 million views on YouTube and Facebook. It has had a significant positive impact on our brand recall and business metrics along with positive engagement and organic love being shown by audiences on digital platforms. We have surpassed the campaign targets that we were tracking and have seen massive results.
Throw some light on the ‘Switch Gully’ campaign. What was the inspiration behind the campaign? What has been the response to the campaign so far?
The idea behind Switch Gully was to create a one-stop-shop for everything cricket prior to the IPL. Switch Gully was our attempt to make the cricket fever come alive on the PhonePe app. It was a digital version of a live experience zone for cricket aficionados where they can get quick access to great content, exciting contests and amazing offers while enjoying their favourite sporting event. It allowed fans to follow match scores, test themselves with fun cricket quizzes and games and purchase cool merchandise while also availing exciting offers like cashback on mobile & DTH recharges, food orders, ticket purchases and much more. All this was brought to PhonePe users via exclusive tie-ups with our merchant partners.
Where is the brand investing in during the ongoing festive season?
Our investments continue to be in line with our key focus areas as a business. These include growing our user base to 500 million from the current 250 million by December 2022, launching more products in the Financial Services space, growing the offline merchant network to 25 million covering every corner of the country (from 13 million merchants across 500 cities currently) and partnering with more brands on our Switch platform (currently has 260 partner apps).
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