Rahul Chari, CTO and Co-Founder at PhonePe, one of India’s leading payments app providers, recently confirmed that they’ve onboarded 300 million users after launching operations around 5 years back.
Chari writes in a blog post that they launched the PhonePe app on August 28, 2016 — which is exactly 5 years ago. The expressions on their faces “capture the variety of emotions we were all feeling on that day — a combination of nervous excitement on the kind of reception the product would receive, along with a sense of pride given that we had put in 8 months of immense hard work to get to that point,” the company CTO noted.
He added that what’s really heartening is that many of their initial team members are “still a part of the PhonePe mission.” They along with the bigger team continue to “enjoy every new launch in the same way as if it is still Day 0,” Chari added.
He also mentioned that this continues to be “one of the big reasons for the kind of success we have achieved and the love we have received from our users.”
“Right from Day 0, we made it a point to keep the user and the merchant at the center of all our product adventures, with a maniacal focus on the Payments Success Rate. Every percentage point increase in the success rate still gets a hurrah and every drop in the success rate is still a cause for concern jointly between the technology, product and payment operations team.”
Chari also noted that the group decided early on to prepare a joint weekly-payments review looking into different aspects of the payments flow, “not just the payment transaction — errors when fetching a bank account, setting or changing the UPI PIN, checking the bank balance etc.”
He further noted that he still remembers an email from one of their architects to everyone in the company with a single word — “Memorize” — “the attachment in the email being the document covering UPI Error codes.”
He also mentioned that they had “sliced and diced the error codes by operation type, by banks, by time of the day and every other possible way to provide as much information as possible so that we could jointly (NPCI and Banks) address the problem of low success rates quickly to ensure that UPI trials converted to frequent usage as early as possible.”
He also shared:
“While the all-hands-on-deck approach to shore up payment success rates in the early days of UPI was expected, the practice of joint weekly-deep-reviews on payments continues to this day with the same approach of taking every percentage point change very seriously. Speed and Reliability of payments, continues to be the mainstay of the PhonePe app.”
He added that while every visible feature that we introduce “garners the lion’s share of attention,” it is the “invisible” efforts that continue to “deepen the trust with our users and engagement with the larger payments ecosystem.”
“Our inline fraud detection platform that intercepts every transaction on the app , the accounting systems that ensure timely payouts to lakhs of merchants on a daily basis, and the customer support systems that continue to push the boundaries of automated resolutions, are all examples of the immense behind-the-scenes technology-driven orchestration that is needed to ensure consistency, reliability and security at scale.”
Complementing this robust platform is a group of missionaries across the business development teams, sales team, the customer support team and the operations team who “bring the human touch to building the relationship with our users, merchants and partners.”
Chari also noted that the question that’s most often asked of them is what helped them cover so much ground “in terms of products, services and consumer-merchant use cases in a short period of time.”
Although external factors like the environment from a policy perspective and catalytic events like demonetization were favorable for the expansion of virtual payments, the main reason for our success, “I believe, is our philosophy of building open, interoperable and neutral platforms with a strong focus on partnerships,” Chari revealed.
He also mentioned that one of their values has been ‘Positive Disruption’ which reads as “Our business solutions are designed to be inclusive and empowering for all ecosystem players. We don’t negatively disrupt our business partners’ profit pools just because we can.”
He added that staying true to the “spirit” of this value, they’ve sought to “follow a path where we are complementary as opposed to being competitive to merchants, partners and the BFSI industry.”
The Switch platform is a good example of this and while they had their share of ups and downs in this journey, the support from “not just our banking and merchant partners but also some of our competitors in times of crisis has been gratifying.”
During the past 5 years, the sense of pride in our rapid growth has been “overtaken by a strong sense of social responsibility,” Chari added while noting that early on in their journey, they received “a testimonial from a customer about how the easy money transfer meant that her house help was able to safely transfer money to her children back home in her native place without the use of any agents.”
According to PhonePe’s management, this inspired their “first TV Ad campaign.” But over the years, many similar examples made them “realize the importance of the freedom to use one’s own money easily and safely.”
The firm’s CTO added:
“The pandemic has only cemented this further, given the sheer dependence of a large part of the population on digital payments for day to day operations. The growth in our user base is driven strongly by semi-urban and rural parts of the country, and for many of them we are the first foray into the world of digital payments and transactions.”
He also mentioned that this has “only meant that we have deepened our investments in automated support with self-healing where possible, proactive prevention of transaction failures and better detection of social engineering frauds.”
“All these investments are paying rich dividends as we see more and more of Tier3 India not only doing money transfers, but also purchasing insurance and trying out investments. The reach we have built and the trust we have earned only implies that we now have a greater responsibility towards taking the right products in the financial services sector to these users.”
Chari further noted that all of these add up to the efforts of the ecosystem “towards financial inclusion at scale beyond just digital payments.”
The PhonePe co-founder concluded:
“So a Big Thank You to each and every one of you for helping us accelerate from 0 to 300 Million users in 5 years. It has been an exciting journey. And we need all the support we can get to reach a billion users even faster.”