PhonePe aims to expand beyond UPI’s success, driving diversification into financial services like lending, insurance, and wealth management. With over 500 million users and a 47.7% share in the UPI market, the fintech giant is poised to replicate its payments success across new domains.
PhonePe aims to expand beyond payments
Backed by Walmart, PhonePe’s strategy leverages its strong UPI presence to offer credit access to consumers and merchants. Its merchant base of over 40 million serves as a foundation for launching credit instruments and enabling higher spending capabilities.
The company disburses ₹300 crore in merchant loans monthly, with amounts ranging from ₹60,000 to ₹5 lakh. By partnering with top lenders like HDFC Bank and Aditya Birla Capital, PhonePe facilitates these loans without lending directly from its books.
Insurance and lending in focus
PhonePe’s insurance division has seen rapid growth, selling over 9 million policies since 2021, with 4 million sold in 2023 alone. The firm aims to expand insurance penetration by offering a balanced product portfolio and enhancing fraud management capabilities.
In lending, PhonePe avoids buy-now-pay-later (BNPL) offerings but focuses on larger ticket loans for merchants. Its cautious approach to new-to-credit customers ensures sustainable growth and portfolio management.
Expanding beyond UPI payments
While UPI remains its core, PhonePe is diversifying to include business-to-business (B2B) payments. It holds an in-principle payment aggregator licence, enabling significant transaction volumes for small and medium enterprises.
Despite competition from 41 licensed payment aggregators, PhonePe is confident in its operational expertise and compliance strength. The company continues to support offline merchants transitioning to digital payments, reinforcing its leadership in the ecosystem.
The road ahead
PhonePe’s expansion beyond UPI is driven by its innovative financial services and robust ecosystem. With a long-term vision, the company is set to redefine fintech growth, meeting evolving consumer and merchant needs.
