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How PhonePe is driving India’s cashless transition and accelerating growth

PhonePe's innovative offerings empower merchants, boost financial inclusion, and enhance economic growth, aligning with India's superpower aspirations.

How PhonePe is driving India’s cashless transition and accelerating growth

Wednesday November 15, 2023 , 5 min Read

India's digital transformation is a testament to the power of innovation to propel massive economic growth. From a cash-is-king mindset to walking into a store with a smartphone and the PhonePe app, India has transitioned to making payments digitally,almost overnight.

As per the PhonePe Pulse-BCG report, merchant payments are expected to increase from 20% in value today to 65% by 2026, further underscoring the role of the ubiquitous merchant in this transformation. 

Phasing out cash reliance with a suite of payment solutions

You can now find the ubiquitous UPI QR code everywhere: at a hole-in-the-wall chole bhature shop in Delhi, a Chikankari boutique’s counter in Lucknow, or at a beach shack in Goa. The scan-and-pay code, which sees transactions from Re 1 to Rs 1,00,000, was the first step in the digital payments’ acceptance journey for merchants. As contactless payments found their way into the Indian psyche, merchants increasingly adopted QR codes pan-India, taking PhonePe’s presence across 99% of postal codes.

A diverse country like India comes with diverse challenges, and PhonePe has managed to cater to each and every one of them. Merchants with high Average Transaction Values (ATV) require enablement of credit card transactions (through EDCs or UPI), while for other merchants, transactions such as debit cards or UPI would suffice. To prevent identity theft, custom Photo QRs were introduced, following which SmartSpeakers were launched to validate payments in real time.

On average, PhonePe SmartSpeakers are validating over 100 crore transactions per month. By enabling merchants in more than 17,000 postal codes and successfully deploying over 4.4 million devices across India, this innovative solution is positively impacting the merchant ecosystem. The deployment of devices in remote areas highlights the growing adoption and reach of this technology in rural areas. The recent launch of the celebrity voice feature on PhonePe SmartSpeakers allows merchants to validate customer payments in celebrity voices such as the iconic Mr Bachchan’s voice for Hindi. This strikes a chord with millions of Indians, enhancing its appeal to merchants and users alike.

The recent introduction of PhonePe’s new POS device represents a significant milestone in the company’s suite of payment solutions. This device, based on the Android platform, brings about a transformation in the way businesses handle checkouts. Whether customers are at a store counter, a table at a restaurant, a delivery location, or anywhere with cellular coverage, this POS device streamlines the entire payment process, ultimately enhancing the overall customer experience. With this new addition, PhonePe has covered the full spectrum of payment solutions, a clear indication of its commitment to innovation in the payments space.

Driving financial inclusion and creating access to credit

Pre-pandemic, digital payments were an afterthought. However, a bank account and a smartphone are now essentials for even the smallest of businesses - bringing a significant portion of merchants into the formal economy. 

The shift from cash dependence to digital payments has paved the way for enhanced financial inclusivity, establishing trustworthy merchant profiles. Reaffirming the commitment to driving financial inclusion for SMEs and solving merchants’ need for organised credit, PhonePe launched a merchant lending platform on the PhonePe for Business app. This allows banks and NBFCs to provide credit opportunities to merchants seamlessly, in minutes.

SMEs that previously faced challenges in accessing credit can now invest in businesses, expand operations and contribute to the overall economic growth.

Building infrastructure for growth

As merchants are fully armed with innovative tools to build their businesses, solving for discoverability would have a leapfrog effect on a historically unseen scale. With this in mind, PhonePe built Stores, an engagement channel between merchants and consumers. This equipped consumers to look for mom-and-pop stores in their vicinity that catered to their specific needs.

Taking a gargantuan step further, PhonePe also launched Pincode, a hyperlocal shopping app built on the ONDC platform that connects local buyers and sellers. This not only solves discoverability but provides access to inventory and takes the business to the buyer’s doorstep, maximising a merchant’s operational potential. 

Impact for merchants

Let’s hear the story of Anitha, who has been running a bakery in Bengaluru for over three years with her sister. Digital payments have been a boon to her business in transitioning to cashless payments and receiving the right ammunition to expand her business. Anitha is one of the early adopters of all PhonePe solutions for merchants. She has been associated with the brand for over two years and says PhonePe has her complete trust and has been an invaluable part of her journey! 

Edging closer to India’s dream of becoming a superpower

Only about a decade ago, we dreamed of a cashless future and here we are! Cashless transactions built on platforms such as UPI and driven by players like PhonePe encourage consumers and merchants alike to contribute to the overall economic growth. 

By introducing measures to bring about transparency and accountability along with minimising costs involved in producing and distributing cash, PhonePe is taking India towards the dream of becoming an economic superpower.