How PhonePe Earns Money? | PhonePe Business Model
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PhonePe is the online payment platform that creates, hosts and manages your online transaction and also, provides various services through the Internet. Today, there are plenty of companies that provide you with the facility of online transactions. PhonePe is included among such companies. National Payments Corporation of India has evolved its technology and provided UPI to make the transactions absolutely convenient.
Well, our minds always come across the question of how these apps (including PhonePe) earn money? Or why do they spend so much money to gather customers? These questions are obvious. To understand this, you need to get your foot stable on the Broker. PhonePe and other similar applications work as a broker app. They work through the possession by leveraging the customers and traders.
In the era of capitalism of data, Online Payments transaction industries are the leading wave. They tend to evaluate their worth extremely high in the data-driven market. Therefore, in this article, we provided you with a basic guide on how PhonePe earns money? Stay tuned!
About PhonePe
PhonePe Business Model
How PhonePe earns money?
PhonePe Revenue Model
How does PhonePe make money | PhonePe Business Model
About PhonePe
The prominently established Indian digital payment application, PhonePe was founded in the year 2015 by Sameer Nigam, Burzin Engineer and Rahul Chari. The application was based on the UPI (Unified Payments Interface) transactions. The company headquarters exists in Bangalore, India.
PhonePe is an successful application that has 11 different Indian languages. It provides plenty of features such as mobile recharge, receiving and sending money, DTH, utility payments, tax savings funds, data cards, and more. As of March 2025, PhonePe has crossed 600 million registered users on its platform.
The Reserve Bank of India has licensed PhonePe for the service of money transactions and payment system with an authorized name.
PhonePe launched a special insurance plan for travellers who attended the Maha Kumbh Mela in Prayagraj, Uttar Pradesh, held from January 13 to February 26, 2025.
The plan, developed in collaboration with ICICI Lombard General Insurance, was offered in two variants: INR 59 for train or bus travellers and INR 99 for domestic flight passengers.
Megha Rani
PhonePe Business Model
Besides the transactions of money from one bank to another, PhonePe has many more tremendous features such as it provides the facility of purchasing grocery, insurance, food and many more.
PhonePe facilitates the supply of the products that are sold on this app. PhonePe is a multiple purpose application. It also provides the service of mobile recharge, electricity bills and other household bill payments.
PhonePe charges the commission on the payments made by the customers from any online or offline merchants. However, the UPI transactions are based on IMPS that's why it doesn't charge any additional money from the banks.
Recently, PhonePe has launched its POS machine that is available in almost every shop that allows PhonePe payment. The POS machine makes the payment extremely convenient and handy. PhonePe POS machine is powered by Bluetooth technology and is worlds lowest cost POS device in the world.
Alan Joseph
How PhonePe earns money?
Here are the sources through which PhonePe makes money:
Mobile Recharge
As you know, PhonePe provides the facility of online recharge of your mobile very conveniently. It earns from the commission that is made from the operator you recharged on.
Bill Payment
When a bill payment is made through PhonePe on any company, PhonePe gets the commission from the respective company.
Apps
There is a separate column for different apps like OYO Rooms, Dominos, Myntra, Grofers and many more, on the PhonePe app. So, when you do any payment on these mentioned apps, PhonePe gets the commission respectively.
Gift Vouchers
You get plenty of gift Vouchers of different apps like Oxygen wallet, Airtel Money, Freecharge and more on PhonePe. It earns the commission on every sold gift voucher.
Digital Gold
PhonePe also allows you to buy gold, so when you do, it charges a little extra from you than the actual pricing.
Mutual Fund
Recently, PhonePe added the mutual fund's investment features to its app. So, when you invest in any mutual funds, PhonePe charges a distinct amount of commission on the respective company.
UPI Transactions
PhonePe usually does not make money from the UPI transactions. It only analyzes your data to create a new product.
Nitin Konde
PhonePe Revenue Model
PhonePe's revenue has seen significant growth over the years, but expenses have also increased, resulting in continued losses. Below is a detailed breakdown.
| Particulars | FY24 | FY23 | FY22 | FY21 | FY20 |
|---|---|---|---|---|---|
| Revenue | INR 5,725 crore | INR 3,085 crore | INR 1,692.8 crore | INR 725.3 crore | INR 427.2 crore |
| Expenses | INR 7,756 crore | INR 5,907 crore | INR 3,705.7 crore | INR 2,456.9 crore | INR 2,202.9 crore |
| Profit/(Loss) | INR -1,996 crore | INR -2,795 crore | INR -2,013.8 crore | INR -1,728.8 crore | INR -1,771.7 crore |
In 2024, PhonePe's operating revenue grew by 74% to INR 5,064 crore, up from INR 2,914 crore in 2023. However, total expenses also increased by 31% from INR 5,907 crore in 2023 to INR 7,756 crore in 2024. Despite this, PhonePe reduced its losses by 29%, with a loss of INR 1,996 crore in 2024 compared to INR 2,795 crore in 2023.
PhonePe does not have its own payment bank and also, it doesn't charge any money when you regress any of your money back to your account. In fact, it provides you with different offers and cashback of the money you paid through any transactions.
Therefore, PhonePe works by promoting several brands on its app with different offers and vouchers. It earns the major fraction from the bill payments and recharges.
Moreover, PhonePe earns from Yes Bank by providing the analytic database and targeting its products to the users. Flipkart also utilises the service of monitoring purchasing and catching better advertisers, deals and notification through PhonePe to the customers. It collects and saves an ample amount of money from Flipkart from preventing channeling other payments apps.
Conclusion
PhonePe facilitates the services and payments along with the online transactions for several products available on the PhonePe application or website or any other external merchant stores (online or offline).
PhonePe is not an established bank or online payment bank. It is an application with a service not based on any banking services but itself. PhonePe works through a monopoly to earn its money and provides a safe and secure online transaction.
It is very prominent and widely famous across India with its great offers and services. PhonePe earns money in an absolute conventional manner and provides the best features and offers for payment.
FAQs
What is PhonePe and how does it work?
PhonePe is a mobile payment app that lets users send money, pay bills, recharge, and shop using the UPI system. It works by linking your bank account to the app, allowing secure and instant transactions directly from your phone.
Who is CEO of PhonePe?
Sameer Nigam is the CEO of PhonePe.
Does Flipkart owns PhonePe?
Yes, Flipkart acquired PhonePe in 2016.
Does PhonePe charge for money transfer?
PhonePe does not charge for money transfers.
Who has founded PhonePe?
Sameer Nigam is the founder of PhonePe company. He has founded PhonePe in 2015.
Who are the top competitors of PhonePe?
PhonePe's top competitors include:
- Mobikwik
- Paytm
- Google Pay
- BharatPe
- Juspay
- Razorpay
What is the difference between PhonePe and PhonePe business?
PhonePe is for individual users to send money, pay bills, and recharge, whereas
PhonePe Business is for merchants to accept payments, track sales, and manage transactions.
What is the business model of PhonePe?
PhonePe operates on a service-based business model. It earns revenue by charging merchants transaction fees, offering value-added services like recharges and bill payments, and selling financial products such as insurance, mutual funds, and digital gold. The company also provides POS devices to merchants and uses user data to cross-sell personalized financial products. While UPI transactions are free, PhonePe’s income comes mainly from these additional services.
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