Promoting Financial Inclusion: Equal Access For All

Digital payment services have revolutionised the entire payment industry, benefiting not only business people but also multiple vendors who encourage customers to "PhonePe karo." "We take pride in the fact that a majority of our user base is from small towns and villages in India, which is a testament to the power of technology to democratise access," says Deep Agrawal, Head of Payments, PhonePe.

The online payment solution provider has focused on enabling the acceptance of digital payment for merchants through its interoperable QRs in rural areas. Over 35 million merchants have accepted digital payments via the PhonePe QR, influencing consumers to adopt digital payments. “Today, over 75 per cent of our transactions originate from tier-2 and beyond cities, towns, and villages," adds Agrawal.

The company has always prioritised consumer convenience and value creation, making them central to all their ideas. As a leader in the digital payments space, it has consistently launched new offerings to attract consumers. These offerings include Aadhaar-based UPI onboarding, UPI international, UPI LITE, SmartSpeaker in 11 Indian languages, a merchant lending platform enabling banks and NBFCs, and a point-of-sale (POS) device.

Its open ecosystem approach is a key differentiator from others in the space and has been ingrained since inception. "The open ecosystem approach has facilitated the creation of numerous hooks and connections among various ecosystem players, enabling consumers, merchants and service providers to engage and transact with each other at scale," says Agarwal.

Financial Inclusion

PhonePe believes that everyone should have equal opportunities to access products and services, irrespective of their location or socio-economic status. "In addition to addressing the fundamental need for money exchange, we strive to educate our customers about the equity market and help them create and grow wealth through mutual fund products in a simple and seamless manner," explains Agarwal.

Within a short span of time, the company has facilitated access to its investment solutions for investors from approximately 19,000 PIN codes across tier-1, tier-2 and tier-3 cities and beyond. "We have sold over 5.5 million policies across general, health, and life insurance. This reflects the platform's deep penetration and the tremendous customer response to our offerings across various geographies and income levels," adds Hemant Gala, Vice President, Financial Services at PhonePe.

More than 75 per cent of PhonePe's users come from non-metro areas and many of them are purchasing insurance for the first time. Many of these investors have been consistently investing through systematic investment plans. Agarwal says that this trend will continue to strengthen as the company introduces investment solutions that are simple to understand and easy to use, allowing millions of customers to achieve their financial goals. Digital distribution has played a crucial role in expanding the industry's customer base in recent years. “We believe this is just the beginning, and the trend will gain significant momentum in the future,” he says.

Insurance Penetration

Gala says to address the critical need for greater insurance penetration, PhonePe has launched insurance services with a mission to simplify the user experience. The payment solution provider aims to educate individuals about the importance of insurance by offering easily understandable products, facilitating instant enrolment through a simple and intuitive user experience (UX), and digitally distributing them across the country at highly affordable prices. PhonePe acts as a customer representative, collaborating closely with insurers to develop, underwrite and price the products.

Gala emphasises that this strategy positions PhonePe's insurance offerings to serve its vast user base of over 46.5 crore, driving insurance adoption across all socio-economic strata. Notably, a report by the General Insurance Council of India reveals that more than 60 per cent of vehicles in India, primarily two-wheelers, are uninsured, despite the mandatory requirement for motor insurance under the law.

To further create insurance awareness, particularly for under-penetrated segments like Bike Insurance, PhonePe has launched a large-scale marketing campaign for tension-free insurance, driving both awareness and the need for insurance products. Within a short span of time, PhonePe has managed to bring in innovative insurance product offerings with India's top insurance companies.  

Data Safety

When it comes to money and payments, trust is key. Trust comes from securely handling customers' data as well as from very high transaction success rates, and from not encountering issues that require customer service to resolve. To keep customers’ data safe, the platform has adopted an advanced security infrastructure to keep transactions safe.

PhonePe prioritises the security of every transaction by implementing multiple layers of authentication, including fingerprint/face ID, UPI PIN, and password. Only the user and the intended recipient have access to the payment details, ensuring privacy. The dedicated security teams continually monitor all transactions in real time to detect and prevent any suspicious activity, promptly reporting fraud complaints and blocking fraudulent users from accessing its platform. With its cutting-edge security infrastructure, the company assigns risk scores to every transaction, automatically blocking those with high-risk scores to ensure the safety of transactions.

“Additionally, to personalise user experiences on our platform, we use a combination of data-driven nudges and user preferences. We employ data models to effectively predict the next best use case for a consumer that they have not yet tried. For example, a consumer may be using PhonePe for recharges but has not explored our electricity bill payment or credit card repayment feature. If our personalisation feature predicts a specific action for a user, our platform effectively communicates it to the user at the right moment,” says Gala.