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How PhonePe uses Technology in its road to success

  • Ritesh Pathak
  • Oct 17, 2020
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Almost all of us have an app installed on our phones that facilitates us with online transactions. The evolution of technology has been so fascinating in the past few years. With the introduction of different tools, our lives have changed and it will change further. Our reliance on technology is increasing and it should because it is endued by the human brain. In this unprecedented time, technology has come to the rescue. The concept of e-commerce, remote working, online education, digital payments, etc. were all made possible because of technological advancements. If there’s anything that is changing frantically and on a very grand scale during this pandemic-led lockdown phase, it has to be the way everyone is flocking towards digital transactions. Digital wallet platforms are witnessing a rise in their usage.


One such example of a digital wallet platform is PhonePe. Everyone may have at least heard about PhonePe, if not used it. It is one of those apps that aid us with online transactions and serves us with many other facilities. It is not easy to gain popularity and achieve success in today's world, but it is not impossible as well. If you work hard and smart at the same time, the road to success is easy to cover. When PhonePe entered the market, Paytm was already well-established. Although the founders took it as a challenge and worked continuously to compete with Paytm and today, PhonePe has surpassed Paytm in terms of their customer base.  


So, in this blog, we will be looking at the journey of PhonePe and also the role of technology in it. We will try to look at every aspect and understand how things changed for PhonePe over years. To start with, we should look at the idea and brains behind starting PhonePe. 



About PhonePe and how it started


PhonePe is a digital wallet platform and online payment company which has its headquarter in Bangalore. The PhonePe app is available in over 11 Indian languages which makes it easier for people to use it. PhonePe users can perform several actions on the platform like online money transfer,  recharge mobile, DTH, data cards, make utility payments, pay at shops, invest in tax saving funds, liquid Funds, buy the insurance, and mutual funds, and gold. These were some basic tasks that almost every payment app offers to its users. PhonePe, along with these basic options, has a tab named PhonePe Switch. PhonePe has partnered with many online platforms that offer e-services, like Swiggy, Myntra, Goibibo, Grofers, etc. so allows its users to take facilities of these platforms. 


Now, talking about the brains behind this startup, PhonePe was started in December 2015, five years ago, by  Sameer Nigam, Rahul Chari, and Burzin Engineer. At present, Sameer Nigam acquires the position of CEO, while Rahul Chari serves as the CTO, and Burzin Engineer is the Chief Reliability Officer. 


“Over the next decade, digital payments are going to become more accessible to the next billion users. Our goal is to facilitate this change by building payment solutions for this user base.”




How has PhonePe evolved over the years?

This image shows a few of the leading partners of PhonePe.

PhonePe partners


After starting in December 2015, PhonePe was acquired by Flipkart in 2016 and based on Unified Payment Interface(UPI), it went live in August 2016. Within three months of the launch, PhonePe was downloaded by over 10 million users. In August 2017, PhonePe surpassed BHIM to emerge as the market leader in UPI transactions. In 2018, PhonePe also became the fastest Indian payment app to get a 50 million badge on the Google play store. PhonePe is accepted as a payment option at over 10 million offline and online merchant outlets across 400 cities in India covering food, travel, groceries, medicines, movie tickets etc. PhonePe currently has a user base of 200 million.


Talking about PhonePe partnerships, PhonePe is a partner with many platforms offering e-services.


  • In 2018, PhonePe partnered with e-wallet platforms Freecharge, JioMoney, and Airtel Money. This allowed users to link their existing wallet with these platforms with PhonePe. 

  • PhonePe is in partnership with RedBus, Ola, eat.fit, Swiggy, Myntra, OYO, Goibibo, and around 180 other consumer brands. PhonePe has integrated these brands’ PWAs (Progressive Web Apps) or mobile-sites to its Switch platform. Such partnerships benefit businesses of all sizes and also the users in a way that users can access their accounts with different apps in one place, and the businesses can build and deploy apps on PhonePe Switch with a unified login and payment experience for users.

  • PhonePe has also a tie-up with Aditya Birla Sun Life Mutual Funds. It allows users to invest in ‘liquid funds’ which enable these customers to earn yields on savings lying idle in their wallet accounts.

  • In January 2020, PhonePe announced its launch of international travel insurance in collaboration with Baja Allianz General insurance. PhonePe became the first digital payment platform in India to do so. 



PhonePe’s Recognition and small innovations


PhonePe has always been innovative. One such innovation came in October 2017 and in the form of a low-cost POS device that was built in India. The Bluetooth enabled POS device looks like a calculator and works with AA batteries. The hardware uses Bluetooth connectivity and enables payments through all the mobile devices that can access the PhonePe app. Recently, in February this year, PhonePe enabled a chat feature on its app that allows its users to send and receive messages while transferring money. The company launched the PhonePe ATM in January 2020. The PhonePe ATM allows neighborhood Kirana stores to dispense cash in real-time to customers.


PhonePe also boasts of many awards and recognitions. In 2018, it was awarded as the Best Mobile Payment Product or Service Category at the IAMAI India Digital Awards 2018. In the same year, PhonePe also won the SuperStartUp Asia Award. PhonePe was announced as a winner at the 8th Annual India Retail and e- Retail Awards 2019. PhonePe also won the ‘Best Mobile Payment Product or Service’ at the 9th India Digital Awards 2019 organized by IAMAI. 


“In our journey over the last three years, our initial focus was on unlocking the value on peer-to-peer money transfer for our customers and tapping the unorganized money exchange space and money transfers among friends and families. Secondly, we unlocked value in merchant payments, specifically among online players, because that was a familiar area for us due to our Flipkart background. Whereas, in the third year, we started focusing heavily on offline merchants, wherein we have scaled massively – almost 10 million merchants.”

-Rahul Chari, Co-founder, and CTO, PhonePe


The Use of Machine Learning by PhonePe


This image depicts the use of Machine Learning by PhonePe.

PhonePe is using Machine Learning efficiently


  • PhonePe is leveraging Machine Learning to enhance its user experience. The data science team leads the machine learning platform and works on models using Python. 

  • The compute layer uses ML flow, Spark, and Apache. PhonePe uses Hbase as primary Big Data technology that lies in-line in the user path and aids them in decision-making capabilities. However, other companies use Hbase for offline jobs. 

  • To personalize user experience, PhonePe uses a combination of data-driven insights and user preferences. It is different for different users. The machine learning model learns to personalize reminders on the basis of feed generated by the date of the bill and payment mode. With every transaction spike, the model self learns. For example, for credit card bill repayment or electricity bill, a combination of ML and data science infers the bill and the due date at which the user’s reminder is set. Taking help of such references, the ML models are able to suggest more accurately. This is then used to monitor user spending, and prevent the users to miss any payment dates. However, users can opt not to get these reminders if they don’t want them. 

  • PhonePe is using Machine Learning to drive increased conversion rates for its users and partners. Machine Learning is used to determine the best possible action on the PhonePe by users. The ‘In-App’ section has several brands offering products in various categories such as travel, food, lifestyle, wealth management, etc. On the basis of user behavior, transaction patterns, preferences, and filtering purchases, the next-best-action is anticipated. After all, this is done, personally curated offers are thrown at them urging to avail these offers. This has led to higher conversion rates both for the users and partners. 


So, these were some of the uses of Machine Learning by PhonePe. It is used to enhance user experience, increase conversion rates, and others. Rahul Chari, the Chief Technology Officer takes pride in these developments that PhonePe has been able to accomplish. Talking about it in an exclusive interview with Express Computer, he said,


“At PhonePe, when we build something, we don’t build it as just a feature. We look at the core capabilities that can power a particular feature and how we can build it in a more generic manner, allowing it to unlock even more value in the future. Another focus has been on investment in intelligence through data. Having one of the best analytics teams, we have a major focus on data-driven decision making. Additionally, our data science teams are investing in various models that are powering our risk and fraud detection system, promotions platform and CRM. We believe that users have a personalised experience and they must not be presented with a lot of information and data intelligence plays a key role in ensuring this.”

- Rahul Chari, Chief Technology Officer, PhonePe


He had a lot more to talk about which he did in the interview. (Read the full interview here)




PhonePe has come a long way after being introduced in 2015 for the first time. From starting as a digital wallet platform to becoming the market leader in UPI transactions, PhonePe has an interesting journey. PhonePe offers a lot many services other than a digital wallet. It allows its users to transact money online using the Unified Interface System(UPI). Users can also use it to recharge their mobiles, DTH, data cards, make utility payments, book tickets, and many other services can be availed. PhonePe also has a dedicated slot named PhonePe Switch that allows users to use different platforms offering different e-services at one place. PhonePe has continuously grown over the years and technology has a great role to play on it. 


PhonePe uses Machine Learning and other technologies efficiently. They use ML to enhance the user experience by making it more personalized. ML also helps PhonePe in driving more conversions for both its partners and users. Machine Learning also anticipates the next-best-action. PhonePe uses this technology to throw curated offers at its users and urge them to avail it. 

So, PhonePe is a very good example before us to prove the fact that technology has made everything easy and efficient. PhonePe has fierce competition from other digital wallet platforms like Paytm and Google Pay, but it has managed to stay ahead with the wise use of technology.

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