PhonePe, the Walmart-owned digital payment platform, more than doubled its losses in 2018-19 to Rs 1,905 crore compared to a year before, according to a registrar of companies (RoC) filing.
The firm, facing stiff competition from financial technology giant Paytm, as well as Google Play, has been working hard on gaining market share. Revenue in FY19 rose fivefold, to Rs 245.8 crore. According to previous RoC filings, the net loss in 2017-18 was Rs 791 crore, way higher than the Rs 129 crore in FY17.
Employee benefit expense in FY19 had risen 308 per cent to Rs 531 crore from a year before.
Google Pay posted a net profit of Rs 5.1 crore in FY19, with revenue of Rs 1,119 crore, an increase of 2.5 times as compared to the Rs 438.3 crore in FY18. PhonePe has been on an expansion drive. It has been trying to increase its footprint offline to take on Paytm and Google Pay, which has made major inroads into tier-III/tier-IV cities and smaller towns.
The company last month announced that its app drove 380 million transactions in August, with 90 million offline transactions. It claims to be accepted as a payment option across 6.5 million offline stores in 210 cities. According to several reports, the company is independently trying to raise close to a billion dollars for a next stage of expansion. It claims to have at least 150 million users.
While PhonePe operates its payments system through semi-closed prepaid instrument services and Unified Payment Interface (UPI), it says it is ‘also actively exploring other business avenues in the payments and e-commerce space’. PhonePe banks on its offline merchants to make payments through not only UPI but also credit cards, debit cards and external wallets.
Payment apps like PhonePe, Google Pay, and Paytm are in an increasingly competitive market. While some incumbents took time to switch to the government-endorsed UPI, PhonePe, and Google Pay built their systems around the platform. Recently, UPI claimed to have completed a billion transactions since its launch three years ago.