As PhonePe Ltd prepares for its initial public offering (IPO), disclosures in its updated draft red herring prospectus (DRHP) shed light on the massive scale and sophisticated monetisation of its merchant ecosystem.
Far from being a “free” service, the company’s merchant infrastructure has evolved into a multi-billion rupee revenue engine powered by 47 million businesses and millions of physical payment devices.
The data filed with the Securities and Exchange Board of India (SEBI) reveals that PhonePe has achieved near-total coverage of the Indian market:
As of September 30, 2025, PhonePe’s registered merchant base reached 47.19 million, covering 98.61 per cent of all pin codes in India. As of March 31, 2025, this base represented between 77 per cent and 80 per cent of India’s total trade and services merchant population.
Monthly active merchants stood at 11.31 million in March 2025, accounting for approximately 54 per cent of all active UPI merchants in the country.
Daily active merchant engagement rose significantly to 60.77 per cent of monthly actives by September 2025, up from 44.18 per cent in March 2023.
PhonePe’s physical footprint is a key driver of “sticky” subscription revenue. The 9.19 million devices currently deployed serve as more than just payment tools; the Smartspeaker acts as a communication medium, delivering business updates and alerts to merchants. This hardware network is maintained by a massive field force of 25,657 team members and over 31,000 commissioned agents focused on rural expansion.
Perhaps the most rapid growth area identified in the DRHP is Merchant Lending. By leveraging transaction data from its 47 million merchants, PhonePe provides credit insights to partner lenders for collateral-free loans, according to its IPO papers.