Chennai: The Indian digital payments scenario has not grown more in the recent past than the market had anticipated. Although players in the field are getting up to speed and coming up with new services, they have barely scratched the surface of what is essentially a gold mine.
PhonePe has been one of the leading players in the field and had crossed two billion transactions recently on the app. The Bengaluru headquartered digital wallet firm had in the fag end of last year registered its wealth management division and recently launched its tax-saving product for consumers.
News Today had an interaction with Terence Lucien. who is the head of Mutual Funds at PhonePe. Here are the excerpts-
Q: PhonePe is now entering new arenas in the wealth management division. Was this planned to bridge the market gap and potentially take the lead from Paytm?
A: We started with the vision to solve for a customer’s payment and financial needs in four phases – send, spend, manage and grow. As the first step in our journey, we were the first non-banking app to launch on UPI and focused on creating features which enable users to ‘send’ money. We then solved for ‘spend’ money i.e. enabling great use cases for customers to spend inside the PhonePe app, partnering with large online/offline merchants and driving acceptance with millions of small stores across the country.
Now we are at a stage where our customers love the app, the experience we provide and the use cases we have innovated with. There is a great amount of trust our users have on the PhonePe app and we feel it is the right time for us to start helping them ‘manage’ and ‘grow’ their money, starting with Digital Gold we launched last year followed by the tax saving solution this year.
Q: Give us more insight into how the partnership with ICICI Prudential and Aditya Birla Sun Life came into fruition.
A: At PhonePe, our key focus is to provide our customers with the best experience. Both partners were selected after a careful and in-depth study of their money management as well as their digital capabilities. In India, digital investing is still at an extremely nascent stage. Hence, we worked closely with all partners to ensure that we not only simplify the entire customer experience but also educate customers about the entire investing process.
Q: Could you give us a break-up of how much cash can be saved by users who come under different tax brackets?
A: The Government of India has created many attractive tax-savings opportunities through which Indians can save a lot of tax. We launched Tax Saving Funds so our customers can save tax in just a few minutes and that too in a completely paperless way. Under this feature, customers can save up to Rs 46,800 in tax every year under Section 80C of the Income Tax Act. The amount of saving is directly related to your tax bracket. If one were to invest the maximum amount of Rs 1.5 lakh, under Section 80C, people under the annual income tax bracket of 5 per cent would save Rs 7,800, 20 per cent would save Rs 31,200 and those in the 30 per cent bracket would save Rs 46,800. (It includes savings in Education Cess of four per cent)
Q: Can you provide us details about new services that are on the anvil from your firm with respect to wealth management?
A: We are planning to launch a few services for consumers in the mutual fund and insurance space this year. We are working very closely with existing players and partners to create unique and innovative products for consumers in this space. This is still work in progress and we will introduce these offerings soon.
Q: How important is innovation when it comes to being on top of your game? How much does PhonePe spend when it comes to new research and product development?
A: We won’t be able to comment on the investment figure. PhonePe is a tech-fin company, all our products and services are deeply rooted in innovation and technology. Our vision is to use technology to build a large, scalable and open transaction ecosystem. We are continually innovating to bring more and more use cases into the PhonePe app with a view to enable the faster adoption of digital payment solutions.
Q: Give us a glimpse about the future of the market. What do you think lies ahead for PhonePe in India?
A: According to a NITI Aayog report, the digital payments market in India is slated to reach $1 trillion by 2023 and mobile payments are expected to rise from $10 billion in 2017-18 to $190 billion by 2023. The digital payments industry has taken off in the last few years and as has barely scratched the surface. There is a huge potential for companies like us to create seamless payment experiences for consumers and merchants. The idea is to reach out to a billion Indians who have the means to transact but either don’t know or don’t understand digital payments.
| On Walmart’s ownership |
| “We are happy to have a strategic and long-term partner like Walmart backing us. They are very excited about our business as well as about the overall digital payments ecosystem. We have partnered with the Indian arm of Walmart to make PhonePe live as a payment option across over 23 Best Price stores in the country. This partnership will help in digitising over a million Kirana stores in tier II and tier III cities. We are also exploring opportunities with them in lending or credit solutions which can be offered to small-time sellers besides value-added services that help can increase footfalls to their stores,” said Terence. |
| Stats |
| * PhonePe users: 150 million * Total transactions: 290 million * Annual TPV Run rate: $85 billion * Overall offline Merchant Base: Over five million * Staff Headcount: 1,800 |