Tier-II & beyond cities adopting digital payments way faster than Metros and tier-I: PhonePe

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September 03, 2021 2:45 AM

Nigam was speaking at the launch of PhonePe Pulse, an interactive website with data, insights and trends on India’s digital payments.

The firm claims to have seen digital transactions from over 19,098 pin codes, covering more than 99% of the country. The firm claims to have seen digital transactions from over 19,098 pin codes, covering more than 99% of the country.

Small town India is adopting digital payments way faster than metros and tier-I cities, said PhonePe that records nearly 80% of its total transactions (including financial services) from tier-II, -III, -IV cities and beyond. The firm claims to have seen digital transactions from over 19,098 pin codes, covering more than 99% of the country.

“We are excited about the prospects in multiple verticals. Our SIP launch in mutual funds is scaling super fast. Insurance, particularly sachet insurance products are getting sold in tier-II, -III (cities) and beyond at a very, very rapid pace. We believe we are now the fastest growing insurtech company in India already. We are going to enter multiple other verticals,” founder & CEO Sameer Nigam said on Thursday.

Nigam was speaking at the launch of PhonePe Pulse, an interactive website with data, insights and trends on India’s digital payments. A first of its kind industry initiative, the website reveals digital transaction habits of over 300 million Indians at a district level. The insights on the website have been drawn from two key sources — the entirety of PhonePe’s transaction data combined with merchant and customer interviews, the firm said. Interestingly, the average mutual funds investment size in Patiala is Rs 30,000 which is 2.5 times that of Mumbai’s, according to the insights published on the platform. “The next phase of digital payments growth is being driven by over 500 million Indians residing in Bharat,” said PhonePe.

As of July 2021, the firm had 13.3 crore monthly active users. The company holds a 46% UPI market share. Earlier this week, PhonePe announced that it has been issued an Insurance Broking licence from the Insurance Regulatory and Development Authority of India (Irdai) which will enable it to distribute insurance products from all insurance companies in India.

Even as a clutch of local start-ups are gearing up to get publicly listed, PhonePe is in no hurry. Nigam said the company is flush with capital and will consider an IPO (initial public offering) when it makes sense and there is enough reason to go public. “I think this company is in a sector….we are already heavily regulated and we are getting deeper into financial services. So, I think it is a foregone conclusion that the right answer for PhonePe some day is to become a publicly-listed company,” Nigam said.

The company’s revenue from operations increased to Rs 371.76 crore in the year to March 31, 2020, from Rs 184.22 crore in FY19. Although revenues widened considerably, the company remained in the red. Net losses reduced by a mere 7% year-on-year to Rs 1,771.48 crore in FY20.

Last year, Walmart-controlled Flipkart undertook a corporate restructuring, spinning off PhonePe as a separate entity. The move, analysts reckon, will give the digital payments firm a bigger play within the financial services space.

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