PhonePe Success Story – Founders, History, Business & Revenue Model


In the ever-evolving landscape of modern society, the pursuit of convenience and simplicity has triggered a remarkable transformation within the banking industry. The emergence of digital payments and mobile wallets has relieved individuals from the burden of carrying physical cash, and in this domain, PhonePe has risen as a prominent figure.

Mobile applications have become the favored avenue for conducting various transactions, ranging from everyday grocery shopping to settling utility bills and recharging mobile devices. This digital shift has not only mitigated the risks associated with cash handling but has also revolutionized the overall efficiency and efficacy of the banking and financial sector.

PhonePe, an Indian UPI-based app, has simplified the lives of millions of Indians. Founded in December 2015, PhonePe was acquired by Flipkart and its parent company Walmart a year later. This acquisition marked a turning point for PhonePe, leading to significant growth and expansion. Currently, Flipkart holds 87% of PhonePe’s stakes, while Walmart owns another 10%, and the remaining shares are held by minority shareholders of Flipkart.

PhonePe has established itself as the market leader in India’s digital payments space. The app allows users to digitally manage their bank accounts, providing convenient access to funds for various purposes. Users can link their credit and debit cards to a mobile wallet to make digital payments seamlessly. PhonePe also enables instant money transfers, among other essential features.

While currently headquartered in Singapore, PhonePe is set to relocate its headquarters to India, according to reports from July 20, 2022. 

PhonePe – Company Highlights

Company NamePhonePe
FoundersSameer Nigam, Burzin Engineer, and Rahul Chari
FoundedDecember 2015
Valuation$5.5 Billion (2021)
Revenues$92.85 mn (FY21)
Funding$1.99 bn (April 2022)
Parent OrganizationFlipkart

How Does PhonePe Work? | About PhonePe

PhonePe, founded in December 2015, is a prominent digital payments company that supports over 11 languages. It was one of the early adopters of the Unified Payments Interface (UPI) and became the first UPI payment app to surpass a billion transactions. The app offers a wide range of services, including money transfers, bank balance checks, POS payments, gold purchases, and various bill payments such as phone recharge, DTH, electricity, and gas.

PhonePe has gained significant popularity among Indian merchants and is widely accepted as a UPI app for booking rides, ordering food, and making online purchases. It has also received regulatory approval from the Reserve Bank of India (RBI) to operate as an account aggregator, allowing the sharing of financial data with authorised entities known as Financial Information Users (FIUs) and Financial Information Providers (FIPs). However, customer consent is required before any data is shared.

Although PhonePe is currently headquartered in Singapore, a PhonePe spokesperson announced on July 20, 2022, that the company plans to establish its registered entity in India. Flipkart, the majority stakeholder in PhonePe, will maintain its Singapore headquarters.

PhonePe – Industry

The digital payment industry in India has experienced rapid growth, with transactions increasing by approximately 76% in the past 12 months. The sector is projected to reach a value of around $700 billion by 2022. Within this thriving industry, PhonePe holds a dominant position with a market share of 46.3%, while Google Pay trails behind with a market share of 36.4% as of December 7, 2021.

PhonePe – Founders And Team

Sameer Nigam, Rahul Chari, and Burzin Engineer are the founders of PhonePe.

PhonePe – Business Model

PhonePe is a UPI-based payment platform that facilitates money transfers between bank accounts. In addition to its core payment services, the PhonePe mobile app offers various features that enable users to purchase products and access services such as groceries, insurance, and food. The company’s role involves promoting these products and services to its users.

PhonePe also provides convenient options for mobile recharge and enables users to pay their electricity and gas bills through the app. Notably, PhonePe has introduced a Point of Sale (POS) machine, which has become prevalent in shops and Kirana stores across India. This POS system allows customers to make payments conveniently using PhonePe.

Recently, PhonePe obtained a license from the Insurance Regulatory and Development Authority of India (IRDAI) to operate as an insurance brokerage firm. This authorisation enables PhonePe to offer insurance products from multiple insurance companies to its customers. Moreover, PhonePe has the opportunity to provide personalised insurance offerings to its large user base, leveraging its digital platform.

With its expanding range of services, PhonePe continues to enhance its position as a comprehensive digital payment and commerce platform, catering to the diverse needs of its users.

PhonePe – Revenue Model

PhonePe generates revenue through various means, including commissions from product promotions on its app and partnerships with partners through its ‘Switch’ platform. Similar to recharge points or centers that earn commissions from telecom companies when customers recharge their phones, PhonePe also receives a commission when users recharge their phones through its app. The company also earns a commission from online purchases made by users through its platform. With its large user database, PhonePe leverages data insights to understand payment patterns, customer purchasing behavior, and retailer/store details, which contribute to its profitability. The platform continues to expand its customer base through promotions and offers.

However, PhonePe recently announced that it would be experimenting with processing fees for mobile recharges made through its app. As of October 23, 2021, the platform introduced a small-scale experiment where processing fees of up to Rs 2 would be charged. Recharges between Rs 50-100 would incur a fee of Re 1, while recharges above Rs 100 would have a fee of Rs 2. Recharges below Rs 50 remain free. This move has garnered mixed reactions from users, with some expressing concerns and potentially considering alternative platforms. PhonePe’s competitor, Paytm, also voiced opposition to the concept of charging customers, emphasizing the importance of building trust without additional costs.