PhonePe has obtained Gupshup’s proprietary technology GSPay, a conversational AI platform, to launch UPI payments designed for feature phone users.

PhonePe stated that it plans to tailor the newly acquired GSPay IP and introduce its own UPI-based payment solution specifically for feature phones.  The company believes this will help close the fintech gap between feature phone users and smartphone users in India.

“….this group (feature phone) of users has not received adequate service from the digital financial industry and the wider startup ecosystem in the past,” stated Sameer Nigam, cofounder and CEO of PhonePe.

In 2023, Gupshup launched GSPay. This technology solution utilizes SMS to create a seamless payment experience for feature phone users.

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This technology is based on UPI 123PAY, a payment solution developed by the National Payment Corporation of India (NPCI) to facilitate digital payments on feature phones.

This follows the NPCI’s decision to raise the per-transaction cap for UPI 123PAY from ₹5,000 to ₹10,000 in October of the previous year.

While discussions about an IPO are ongoing, the fintech giant has been quickly broadening its offerings both horizontally and vertically.  PhonePe has recently become a public entity and has enlisted four bankers – Kotak Mahindra Capital, JP Morgan, Citi, and Morgan Stanley – to lead its public listing in the country.

PhonePe is reshuffling its product line by adding new features and offerings as part of all these preparations.

In the fintech sector, PhonePe has recently introduced UPI Circle within its app, allowing primary users to handle payments for family members and trusted contacts.  In addition, PhonePe maintains its position as the frontrunner in the UPI app competition each month, holding nearly half of the market share.

Given its vast userbase in India, there is great anticipation for PhonePe’s IPO.

In addition, PhonePe dominates the fintech market and is venturing into quick commerce and developing its own app store.

PhonePe’s Pincode, which was launched in 2023, is an ecommerce delivery platform that operates in various segments such as groceries, apparel, food, and technology.  Pincode, which initially operated on the Open Network for Digital Commerce (ONDC) platform, exited the network last year to create its own marketplace.

The offering introduced 20-minute delivery options for its users to compete with quick commerce giants.

Pincode has recently introduced a 10-minute delivery service for prescription-based medicines in partnership with pharmacies.  The platform has begun to impose a handling fee of INR 9.

PhonePe is optimistic about advancing its app marketplace, Indus Appstore, evidenced by its recent collaboration with Xiaomi India to substitute the current app store on its smartphones.

PhonePe achieved a reduction of 28% in its consolidated net loss, bringing it down to INR 1,996 Cr in FY24 from the previous fiscal’s loss of INR 2,795 Cr.