PhonePe is a leading Indian digital payments and financial services platform built on UPI that lets users transfer money, pay bills, shop online/offline, and access insurance and investments within one app. Founded in December 2015 by Sameer Nigam, Rahul Chari, and Burzin Engineer, it launched its UPI app in August 2016 and is headquartered in Bengaluru, Karnataka.
Founding and Early History
PhonePe was founded on December 12, 2015, by three visionary entrepreneurs: Sameer Nigam, Rahul Chari, and Burzin Engineer. The founders, who had previously worked together at Flipkart, recognized the transformative potential of digital payments in India and aimed to create a user-friendly platform leveraging the government-backed Unified Payments Interface (UPI) system. Their initial focus centered on peer-to-peer (P2P) and consumer-to-business (C2B) transactions, along with mobile recharges and bill payments
Sameer Nigam, co-founder and CEO of PhonePe, depicted in a professional portrait with a vibrant background
The company’s trajectory changed dramatically in April 2016 when it was acquired by Flipkart, India’s leading e-commerce marketplace. This acquisition provided PhonePe with crucial financial backing and strategic support, enabling rapid expansion of its operations and technology infrastructure. In August 2016, just months after the Flipkart acquisition, PhonePe partnered with Yes Bank to launch its UPI-based mobile payment app, positioning itself as one of the first major players to capitalize on India’s digital payment revolution.
The timing proved fortuitous, as India’s demonetization in November 2016 created unprecedented demand for digital payment alternatives. PhonePe’s early adoption of UPI integration when many competitors still relied on digital wallets gave it a significant first-mover advantage.
Business Model and Revenue Streams
PhonePe operates on a B2C (Business-to-Consumer) and B2B2C (Business-to-Business-to-Consumer) model, positioning itself as a comprehensive digital payments and financial services ecosystem. While UPI transactions remain free for users, PhonePe has diversified its revenue generation through multiple strategic channels.
Primary Revenue Sources
Payment and Transaction Services: PhonePe earns commissions from mobile recharges, bill payments, and utility services, where telecom companies and service providers pay small commissions for each transaction processed through the platform. The company charges merchants a Merchant Discount Rate (MDR) of approximately 0.4% to 0.6% for non-UPI transactions processed through cards and wallets. Additionally, PhonePe has introduced platform fees ranging from ₹1 to ₹2 per transaction for mobile recharges above ₹50.
Financial Services Distribution: This represents PhonePe’s highest-margin business segment. The platform earns commissions from selling insurance policies, mutual funds, digital gold, and enabling stock trading through its Share.Market platform. Every time a user purchases health insurance or invests in mutual funds through PhonePe, the company receives a percentage of the premium or distribution fee. PhonePe has invested over ₹1,000 crore in its insurance broking subsidiary since receiving its license, demonstrating the company’s bullish outlook on this segment.
Merchant Services: PhonePe provides comprehensive payment solutions for businesses, including QR codes, EDC machines, payment gateways, and smart speakers for instant payment confirmation. The company has also introduced a rental model for payment devices, creating steady recurring revenue. With over 40 million merchants on its platform, this network enables PhonePe to offer merchant lending and targeted advertising services.
Platform Partnerships and Advertising: PhonePe leverages user data to offer targeted advertising services to partner merchants through its ‘Switch’ platform. The company also earns commissions through partnerships with various e-commerce platforms, food delivery services, and entertainment providers integrated into its app.
Government Subsidies: Approximately 10% of PhonePe’s revenue comes from digital payment subsidies provided by the Indian government to banks and digital payment players to support the sector’s growth.
Market Position and Performance
PhonePe has established itself as India’s undisputed leader in digital payments. As of 2025, the company commands an impressive 46-48% market share of India’s UPI transaction volume. In recent months, PhonePe has consistently processed over 8 billion UPI transactions monthly, with transaction values exceeding ₹11-12 lakh crore.
User Base and Transaction Metrics
PhonePe crossed a landmark milestone in March 2025 by reaching 600 million registered users, adding 100 million users in just 16 months. The platform processes over 330 million daily transactions with an annualized Total Payment Value (TPV) exceeding ₹150 lakh crore (approximately $1.8 trillion). The company serves more than 40 million merchants across India, covering 99% of the country’s pin codes.
Competitive Landscape
PhonePe’s primary competitors include Google Pay and Paytm. Google Pay holds approximately 35-36% market share with 6-7 billion monthly transactions, while Paytm ranks third with around 7% market share and 1.2-1.4 billion monthly transactions. Together, PhonePe and Google Pay control over 80% of India’s UPI ecosystem, though smaller players like Navi and super.money are gradually gaining ground.
PhonePe’s dominance is particularly notable given that the National Payments Corporation of India (NPCI) has proposed capping individual providers’ UPI market share at 30% by December 2026, a deadline that has been repeatedly extended to allow the ecosystem to adjust.
Financial Performance
PhonePe’s financial trajectory reflects both impressive growth and a strategic path toward profitability. In fiscal year 2024 (FY24), the company achieved several significant milestones.
FY24 Financial Highlights
Revenue Growth: PhonePe’s consolidated revenue from operations surged 73.8% year-over-year to ₹5,064 crore (approximately $610 million) in FY24, up from ₹2,914 crore in FY23. Including interest income from deposits and investments, total revenue reached ₹5,725 crore.
Path to Profitability: Significantly, PhonePe claimed it turned adjusted profitable in FY24, posting an adjusted profit after tax (PAT) of ₹197 crore before ESOP (Employee Stock Option Plan) costs, compared to an adjusted loss of ₹738 crore in FY23. The standalone payments business achieved an adjusted PAT of ₹710 crore in FY24, reversing a loss of ₹194 crore from the previous year.
Loss Reduction: When including ESOP expenses, PhonePe’s net loss decreased 28.6% to ₹1,996 crore in FY24 from ₹2,795 crore in FY23, demonstrating effective cost management despite significant growth investments.
Cost Structure
Employee benefits constituted 46.45% of total expenses at ₹3,603 crore in FY24, including substantial ESOP expenses of ₹1,876 crore. Payment processing charges increased 74.8% to ₹1,166 crore, reflecting higher transaction volumes. Total expenses rose 31.3% to ₹7,756 crore in FY24.
PhonePe CFO Adarsh Nahata explained that the company’s financial strategy anchors on three pillars: predictable and sustainable revenue growth, diversification of revenue streams, and continuing improvements to the bottom line.
Diversification and New Ventures
Beyond its core payments business, PhonePe has strategically diversified into multiple sectors to create a comprehensive financial and digital ecosystem.
Financial Services Expansion
Insurance and Wealth Management: PhonePe has invested over ₹800 crore across its subsidiaries in the past year, with more than ₹426 crore directed specifically to PhonePe Insurance Broking Services. The company offers comprehensive insurance products including health, life, travel, and vehicle insurance, along with mutual fund investments and digital gold purchases.
Stock Broking: In August 2023, PhonePe launched Share.Market, its stock broking platform operated through subsidiary PhonePe Wealth Broking. The platform enables users to trade stocks, mutual funds, ETFs, and pre-curated investment baskets. PhonePe invested ₹287 crore in this subsidiary during FY24.
Consumer Technology Ventures
Pincode Shopping App: Launched in April 2023, Pincode is a hyperlocal e-commerce platform built on India’s government-backed Open Network for Digital Commerce (ONDC). The app connects consumers with neighborhood stores, offering the convenience of online shopping with local retail. PhonePe invested ₹90 crore in Pincode Shopping Solutions.
Indus AppStore: In February 2024, PhonePe unveiled the Indus AppStore, India’s first localized Android app marketplace designed as an alternative to Google Play Store. The app store offers over 200,000 mobile apps and games across 45 categories, with app discovery available in 12 Indian languages. It features a mobile number-based login system and a short-video discovery feature to enhance user engagement. Notably, developers face no app listing fees until April 2025 and can use any third-party payment gateway.
Feature Phone UPI Payments: In June 2025, PhonePe acquired the intellectual property of GSPay from Gupshup to launch UPI-based payments for feature phones. With over 240 million feature phone users in India, this initiative aims to bring underserved segments into the digital payments ecosystem.
Ownership Structure and Funding
PhonePe’s ownership journey reflects the evolving dynamics of India’s fintech ecosystem. In December 2022, PhonePe completed a full separation from Flipkart, becoming an independent entity directly owned by shareholders. Walmart remains the majority shareholder with over 70% stake in both Flipkart and PhonePe.
Major Funding Rounds
In 2023, PhonePe raised approximately $850 million across multiple tranches at a pre-money valuation of $12 billion. The fundraising included:
- January 2023: $350 million led by General Atlantic
- February 2023: $100 million from Ribbit Capital, Tiger Global, and TVS Capital Funds
- May 2023: $100 million from General Atlantic
This valuation represented more than a doubling from PhonePe’s $5.5 billion valuation in late 2020. Other significant investors include Tiger Global and General Atlantic, each holding less than 9% stake.
PhonePe also completed its domicile shift from Singapore to India in 2022, paying over ₹8,000 crore in capital gains taxes to the Indian government. This move positioned the company for eventual public listing in India.
IPO Plans and Future Outlook
PhonePe is preparing for one of India’s largest fintech IPOs, targeting a listing by mid-2026. The company converted to a public entity in April 2025 and filed its draft red herring prospectus (DRHP) confidentially with SEBI in September 2025.
IPO Details
The IPO is expected to raise ₹10,000-13,000 crore ($1.2-1.5 billion) through a mix of fresh share issue and offer for sale (OFS). The offering could value PhonePe at $10-15 billion. Investment banks JP Morgan, Morgan Stanley, Citigroup, and Kotak Mahindra Capital have been appointed to manage the issue.
While Walmart is expected to retain its majority position, early investors like Tiger Global and General Atlantic may partially exit through the IPO. The confidential filing route allows PhonePe to keep financial details private until closer to the launch.
Technology and Infrastructure
PhonePe’s technology infrastructure is designed to handle massive transaction volumes with reliability and security. The platform processes over 100-300 million daily UPI transactions, making it one of India’s most trusted digital payment systems.
The company has invested significantly in scalable architecture, employing advanced software testing strategies including load testing, user testing, and automation to ensure fast and secure transactions. PhonePe’s commitment to technology excellence extends to developing data centers and payment processing systems that maintain high transaction success rates.
In March 2023, PhonePe achieved an annualized TPV run-rate of $1 trillion, underscoring its critical role in India’s digital payment landscape. The platform is accessible in 11 Indian languages, making it inclusive for diverse user segments across the country.
Social Impact and Financial Inclusion
PhonePe has played a transformative role in advancing financial inclusion across India, particularly in underserved and rural communities.
Reaching the Underbanked
With 80% of its transaction volume originating from India’s hinterlands, PhonePe has successfully penetrated areas where traditional banking infrastructure is limited. The platform’s simple, multilingual interface makes digital payments accessible to low-income users and those in remote regions. PhonePe has digitized over 38 million merchants, covering 99% of India’s postal codes.
Empowerment Stories
PhonePe’s impact extends beyond statistics to real-life transformations. Case studies reveal farmers receiving payments directly into their PhonePe accounts, eliminating cash transaction needs and increasing savings by 30%. Small business owners in semi-urban areas have experienced 50% revenue growth after adopting PhonePe for digital payments. The platform has also enabled housewives to save securely and access credit facilities during emergencies without traditional bank visits.
Digital India Contribution
PhonePe has been instrumental in the Digital India initiative, promoting cashless transactions and reducing dependency on cash for greater economic transparency. The platform’s integration with government services enables digital disbursements for subsidies, pensions, and social welfare schemes. The company has also contributed to financial literacy through educational resources and in-app guidance on managing finances.
PhonePe CEO Sameer Nigam has emphasized the company’s commitment: “PhonePe is building products and offerings tailored for the Indian market. We are proud to help lead India’s country-wide digitization efforts and believe that this powerful public-private collaboration has made the Indian digital ecosystem a global exemplar”.
Awards and Recognition
PhonePe’s excellence has been recognized through numerous prestigious awards. In June 2025, the company won first position in the ‘Digital Payment Acceptance Infrastructure (Offline)’ category at the Digital Payments Awards 2025, presented by India’s Finance Minister Nirmala Sitharaman. The same month, PhonePe’s Legal Team was awarded Fintech In-House Team of the Year at the ALB India Law Awards 2025.
In 2023, PhonePe received the Young Turk of the Year award at CNBC-TV18’s India Business Leader Awards. The company has also won accolades for its “Best Compliance Framework of the Year” and recognition for its Compliance Team.
Throughout its journey since 2017, PhonePe has consistently ranked as the #1 Finance App on both Apple App Store and Google Play Store and has been featured among the top 10 most trusted digital brands in India.
Leadership and Vision
Sameer Nigam serves as Co-founder and CEO of PhonePe. Born in Delhi, Nigam holds a Computer Engineering degree from the University of Mumbai, an MSc from the University of Arizona, and an MBA in entrepreneurship from The Wharton School. Before founding PhonePe, he worked at Shopzilla for six years directing search product development, and later joined Flipkart where he served as VP and Senior VP of marketing and engineering. He also founded Mime360 in 2009, which was acquired by Flipkart in 2011.
Rahul Chari, co-founder and Chief Technology Officer, leads PhonePe’s technology strategy, innovation, and development of scalable and secure payment systems. Burzin Engineer serves as Chief Information Officer. The three founders are alumni of Sardar Patel Institute of Technology (SPIT), Mumbai’s 1999 batch, and in December 2024 announced a $1 million grant to their alma mater to boost infrastructure and foster innovation.
Nigam has articulated the company’s vision: “Every milestone we achieve brings us a step closer to realizing our vision of building a truly inclusive financial ecosystem. We will continue building homegrown solutions to meet the evolving needs of our users and help drive India’s digital transformation”.
Strategic Partnerships and Ecosystem
PhonePe has forged strategic alliances across the financial services landscape. The company partners with leading banks, NBFCs (Non-Banking Financial Companies), insurance providers, and mutual fund houses to distribute financial products. Its partnerships with industry leaders bring deep expertise and enable tailored offerings for PhonePe’s customer base.
PhonePe is also a member of the Mojaloop Foundation, working to build cross-platform and cross-border payment systems that drive financial inclusion globally. Recently, PhonePe partnered with the Wadhwani Foundation to power startup and SME growth in India.
The company has established itself as a key contributor to India’s fintech adoption rate of 87%, significantly higher than the global average of 67%. India achieved an 80% financial inclusion rate in just six years under the Digital India initiative—a transformation that would typically require 50 years under traditional systems.
Conclusion
PhonePe’s journey from a 2015 startup to India’s dominant digital payments platform exemplifies the transformative power of technology-driven financial innovation. With 600 million users, a 46-48% UPI market share, and over ₹5,000 crore in annual revenue, PhonePe has fundamentally reshaped how Indians transact, save, invest, and access financial services.
The company’s strategic diversification into insurance, wealth management, e-commerce, and app distribution demonstrates its ambition to become a comprehensive financial services ecosystem rather than merely a payments platform. Its path to adjusted profitability in FY24, coupled with planned IPO by mid-2026, positions PhonePe as a mature, sustainable business poised for continued growth.
Most significantly, PhonePe‘s commitment to financial inclusion—serving 80% of its transaction volume from India’s hinterlands—underscores its role as a catalyst for economic empowerment and digital transformation across the nation. As India’s digital payments revolution continues, PhonePe stands at the forefront, driving innovation, accessibility, and financial inclusion for over a billion Indians.