Payment App PhonePe’s CTO Rahul Chari Utilizes Machine Learning for Fraud Detection

Just like many other industries, Indian startup companies in the fintech field are tapping into the power of artificial intelligence (AI) to make their operations more effective and their productivity soar. One shining example is PhonePe, which boasts a hefty valuation of $12 billion and stands out as a leader in embracing AI within the fintech realm.

Related: PhonePe Introduces UPI Payments for Indians in UAE

During his speech at ‘The GenAI Summit’, Rahul Chari, the CTO and co-founder of PhonePe, shed light on a common misconception. He pointed out that while there’s a lot of chatter surrounding generative AI (GenAI), people often mix up AI with GenAI.

Chari stated that PhonePe has been utilizing artificial intelligence, specifically focusing on machine learning (ML). Machine learning models primarily learn from sample data sets to make predictions with a certain level of confidence. While the capabilities of ML are limited, they are precise.

Chari mentioned that PhonePe primarily uses ML models for risk and fraud detection. He emphasized that ML models are essential for various areas of the business, particularly in fraud detection.

“We process daily transactions averaging between $230 million and $240 million for risk and fraud detection. When even a small fraction of these transactions encounters fraud, the impact is substantial,” he remarked.

Discussing GenAI, Chari expressed optimism about its potential to enhance business value from PhonePe’s standpoint. “I’m particularly thrilled about how GenAI can boost productivity,” he added in a conversational tone.

In the midst of a challenging funding season, PhonePe, supported by Walmart, managed to secure close to $1 billion in 2023, courtesy of investors like GIC and General Atlantic. Since then, they’ve been on a roll, expanding their horizons by introducing various new services. These include separate apps for online shopping (Pincode) and investment technology (Share.Market), as well as their very own app store called Indus Appstore.

The company witnessed a remarkable 77% surge in revenue during FY23, hitting INR 2,913.7 Crores compared to INR 1,646.2 Crores in FY22. This impressive growth was largely fueled by the successful launch and expansion of new products and ventures, such as smart speakers, rent payments, and insurance distribution.

In the previous month, it was announced that users are now able to make digital payments in the UAE using UPI. The GenAI Summit convened key figures in the GenAI industry to explore funding opportunities, the technology’s impact on different sectors, and other related topics.

PhonePe, led by Rahul Chari, strategically deploys artificial intelligence, particularly machine learning models for risk and fraud detection, processing daily transactions averaging between $230 million and $240 million. Chari expresses optimism about the potential of generative AI (GenAI) to enhance productivity. The company’s resilience in a tough funding season results in securing close to $1 billion in 2023, fueling the expansion of services, a 77% revenue surge, and international reach, including enabling digital payments in the UAE using UPI. These developments accentuate PhonePe’s growth and technological advancements in the fintech industry.