PhonePe announces leadership rejig as the startup garners 500 mn users

On Tuesday, digital payments company and Bengaluru-based unicorn PhonePe reached 500 million registered users, solidifying the platform’s position as one of India's premier fintech players.

The milestone comes when India is experiencing a radical transformation in its financial sector as financial technology, or FinTech, amidst challenges in reshaping the delivery of financial services, creating new avenues for innovation and inclusion. 

PhonePe’s journey began in August 2016 with the launch of its flagship payments product on the Unified Payments Interface (UPI), a real-time payments system administered by the National Payments Corporation of India. The platform is used by over 37 million merchants, covering over 99 per cent of postal codes across India.

The company's financial numbers show a 77 per cent year-on-year growth in its FY23 revenue, reaching Rs 2,914 crore compared to Rs 1,646 crore in the previous fiscal year. This growth has been attributed to the company's commitment to expanding its market presence and asserting its leadership in the digital payments landscape.

A fintech startup, PhonePe quickly gained traction as a subsidiary of the online commerce platform Flipkart, thanks to substantial financial backing from US retail giant Walmart, the owner of Flipkart.

However, in 2020, Walmart decided to spin off PhonePe into a separate entity, a process completed in December 2022. This strategic move allowed PhonePe to access more capital from the market to stimulate its remarkable growth.

With its diverse product offerings encompassing online and in-store payments, peer-to-peer transfers, insurance, and wealth products, PhonePe serves a broad spectrum of merchant categories, from local grocery stores and street vendors to renowned retail brands and online travel agencies.

According to the National Payments Corporation of India (NPCI), PhonePe accounted for a substantial 47% of all Unified Payments Interface (UPI) transactions in India in January 2023, firmly establishing itself as a critical player in the country's mobile payment landscape.

Despite the rapid growth of the FinTech industry in India, it faces various regulatory challenges. Balancing innovation and consumer protection remains a key concern for regulators.

The Reserve Bank of India (RBI) and other regulatory bodies are working to create an environment conducive to FinTech startups while safeguarding consumer interests. However, challenges such as data security, cybersecurity threats, and the need for skilled professionals in the FinTech sector must be addressed.

This transformative move within the organisation also led to senior business heads being promoted to the roles of Chief Executives of its new business verticals.

Hemant Gala, an integral part of the founding team, will now spearhead the company's lending business. He has played a pivotal role in shaping the payments business and has dedicated his efforts to expanding the financial services vertical.

Another founding team member, Vishal Gupta, has ascended to the position of CEO for PhonePe's insurance business. Gupta's journey within the organisation has seen him take on various leadership roles, spanning product development, design, risk management, and customer experience, all contributing to the growth of the payments and merchants’ business.

Vivek Lohcheb, who previously led the offline business at PhonePe, is now the CEO of Pincode, where he will be responsible for expanding the offering across key cities in India.

Notably, Lohcheb's entrepreneurial spirit was evident when he founded a payments startup called Trupay before joining PhonePe in 2018. This appointment emphasizes PhonePe's commitment further to enhance its offline merchant network and payment acceptance infrastructure.

To oversee PhonePe's latest venture into the wealth management space with Share.Market, Ujjwal Jain has been appointed. Jain's journey with PhonePe began when his wealth management company, Wealthdesk, was acquired by the payments major in 2022. This strategic move showcases PhonePe's ambition to diversify its offerings and enter the wealth management sector.

PhonePe's CEO Sameer Nigam commented on this transition saying, "We have achieved only 50% of our vision statement of bringing digital payments to 100 crore Indians. As we look to the future, we felt that this is also a great time to redesign the org and elevate some of the key PhonePe executives to take on larger roles in the group."

PhonePe's incredible growth trajectory continues with its expansion into financial services, insurance, mutual funds, stock broking, and lending, as well as the introduction of tech-enabled businesses like Pincode and Indus App Store.