Not worried about rivals, says PhonePe's Nigam after opening data for all

PhonePe has launched PhonePe Pulse, India's first interactive platform with data, insights and trends on digital payments. Nigam said firm has made privacy topmost concern while designing Pulse

PhonePe is not worried about competitive implications after the Walmart-owned digital payments firm on Thursday launched  PhonePe Pulse, India’s first interactive platform with data, insights and trends on digital payments. PhonePe Pulse website analyses digital transaction habits of over 300 million Indians, who are PhonePe registered users to show how India is paying, down to the district level. It showcases more than 20 billion transactions by consumers on an interactive map of India. With over 45 per cent market share, PhonePe’s data is representative of the country’s digital payment habits.

PhonePe is in a fierce battle with rivals such as Google Pay, Amazon Pay, and Alibaba-backed Paytm, which are making significant inroads into the financial services market as well as payments in the country.

Sameer Nigam, founder and CEO of PhonePe said that if the company was worried about the competition, it wouldn’t have started the firm with an interoperable system where it knew hundreds of companies would compete.

“When we launched PhonePe, 30 apps went live on the same day which included banking apps,” said Nigam. “Over the years, we've competed with Google, Facebook and Amazon. If you trust there is no barrier to entry, and innovation is the way to play, then you should not be worried about putting out very large data sets.”

Through its Pulse platform, PhonePe has taken over its 20 billion transactions since 2018 to analyze the country’s digital payment habits. It would also be providing few  APIs (Application Programming Interface) related to it. But Nigam said the company has put privacy as the topmost concern while building and designing Pulse. “We've made sure that no consumer details are available,” said Nigam. “And yet, all of the trends are available to anyone who wants to see them.”

Nigam said it would not have created the Pulse platform if the company didn't believe that competitors will be breaking up its data to look for trends and try to get the competitive edge.

“That's okay. I believe that competitors will also feel the pressure to actually put out different kinds of data and I think that the overall economy and ecosystem would benefit,” said Nigam.

In the context of the government’s initiative related to ‘Non-Personal Data Governance Framework’ when asked if PhonePe competitors should be mandated to put out their data for the benefit of the ecosystem, Nigam said he is against such compulsion.

“I am not for the law that mandates private enterprises to put out the data,” said Nigam. “I would like societal pressure for people (companies) to be more transparent about what's happening, especially large platforms. I want to make sure that people don't feel pressure., because the government is saying PhonePe put out Pulse and that they need to do the same. I think this should come from within. I genuinely believe that we have put this out without any external, investor pressure or market pressure, and that's the best part.”

Digital Payments is a pan India habit. Over 300 million Indians (PhonePe registered users) from 19,000 pin codes now use digital payments. About 4 out of every 5 PhonePe monthly active users are from Tier-2 and 3 cities, and 2 out of every 3 users are from Tier-3 towns. The amount of money that travels digitally in India is more than the GDP of 21 countries, according to the Pulse report.

“Pulse is India's go-to destination for accurate and granular data on digital payments,” said Karthik Raghupathy, Head of Strategy and Investor Relations, PhonePe.

The Tier-2 and 3 towns in India are making big leaps into digital investments and insurance categories. PhonePe’s insurance offering is largely purchased (more than 2/3rds) from customers in Tier 3 cities and beyond. Gold was purchased from over 99 per cent pin codes and Mutual Fund investments from over 95 per cent pin codes in the country.

PhonePe was started in 2015, to solve payments at scale and enable digital inclusion for over 100 crore Indians. Over 22.4 billion transactions have happened to date on the platform. It does annualized total payment volume of over $473 billion.

PhonePe is rapidly expanding across the country. Last year in December, it signed a deal to raise $700 million in primary capital at a post-money valuation of $5.5 billion from existing Flipkart investors, including Tiger Global, led by Walmart, the world’s largest retailer. E-commerce firm Flipkart had done a partial spin-off of PhonePe, which will help it to access dedicated, long-term capital to fund its growth ambitions, including going public by 2023.

But Nigam said PhonePe is in no hurry to launch its IPO and will go public "when it makes sense" for the company, even as a number of Indian internet companies, including rival Paytm, plan IPO in the coming months.

“We have never been in a hurry to get to an IPO. We are getting deeper into financial services. PhonePe someday (has) to become a public listed company. Markets are cyclical,” said Nigam. “Do I have any FOMO (fear of missing out) to go IPO, for any reason other than the governance part of it, zero. I will keep saying that every time people ask me, I don't care when a competitor goes public, I wish everyone the best of luck. We've just scratched the surface.”