How do Google Pay and PhonePe make crores when UPI is free?

 

 

 

Sending and receiving money through Unified Payments Interface, or UPI, is very easy and completely free. Yet, last year, Google Pay and PhonePe together generated a revenue of over Rs 5,065 crore. How did they manage to do this without selling a single product? Let's check...

Voice speakers in shops

A large part of these companies' revenue comes from small shops. Apps like PhonePe make money from the voice-enabled speaker services used in these shops. These are speakers that announce transactions by saying 'Money received via PhonePe'. Each speaker is rented for Rs 100 per month. With over 30 lakh shops using the service, these platforms generate revenue of around Rs 30 crore per month and Rs 360 crore per year. This helps in building trust among customers and makes transactions easier for merchants.

Scratch cards: A vehicle for advertising

Another important way of generating revenue is through scratch cards. They offer small prizes like cashback or discount coupons to customers. But it is not just for consumers but also a new advertising channel for brands.

Brands pay Google Pay and PhonePe to spread their name and offers among lakhs of users. This generates revenue for these platforms. These companies have also transformed the reliability of UPI into a software-as-a-service layer. They provide tools like GST assistance, invoicing, and micro-loans to small businesses.