Rahul Chari, co-founder and CTO of PhonePe, asserts that the foundations of developing products with an impact are design thinking and large-scale technology. He thinks that in order to properly serve and engage a user base of over a billion people, an integrated approach is necessary. During the YourStory India Tech Leaders Conclave 2024, Chari stressed the importance of matching product strategy to population demands and efficiently utilizing technology to produce at scale.
Technology at Scale for Billions
Chari highlighted that building technology at scale involves more than just expanding infrastructure. It requires a deep understanding of the target population and designing products that resonate with their needs. “Normally, it’s always about technology at scale… but we need to think of the product strategy for the population and then determine how we can actually use technology effectively. That’s the only way to build at the level of scale for a billion-plus population,” Chari stated.
PhonePe’s Product Development Philosophy
Reflecting on PhonePe’s product development journey, Chari noted that the company’s philosophy has always been simple yet powerful: to guide every consumer in India through the journey of spend, manage, and grow. This philosophy has been a constant throughout PhonePe’s nine-year journey.
“We had a very simple philosophy of taking every consumer in India through the journey of spend, manage, and grow. And that is something that we have stuck with through our nine-year journey at PhonePe,” Chari explained.
Preserving Consumer Choice
Never denying customers their option is one of the main tenets of PhonePe’s overall business approach. Prior to PhonePe, digital payment methods such as wallets, credit cards, and debit cards were frequently incompatible, resulting in a walled garden effect. By combining multiple virtual currencies into one platform, PhonePe altered that and increased customer choice.
“Until PhonePe came along, there was always a walled garden of instruments of choice, be it a debit card, credit card, or wallet. Each of them was disparate. What it really meant was the consumer’s choice to use any form of digital currency was not really coupled to a single platform. When you are catering to an extremely diverse population, trying to actually force choice, ensuring that every choice is catered to makes a big difference,” Chari elaborated.
PhonePe’s Rapid Growth and Focus on Community Feedback
In March, PhonePe’s app store, PhonePe App Store, reached over one million installs within its first month. The company’s rapid growth was attributed to the varied demand for categories such as finance, games, and social media, especially in Tier II cities. The platform supports multiple languages and prioritizes community feedback for user satisfaction.
“India is extremely aspirational. The trial behavior you get in India for any use case, I don’t think you get anywhere else in the world. But at the same time, if you actually lose them, you lose them much faster than anywhere else in the world. And I think that’s one of the key things that we’ve been on a data pattern,” Chari added.
Importance of Infrastructure and Least Common Denominator
According to Chari, when building services at a large scale, finding the least common denominator, such as supporting infrastructure, becomes extremely important. For Unified Payments Interface (UPI), the least common denominator is debit cards, as they are the simplest and most widely accessible method of payment.
“UPI was actually love at first sight. I always call it because it’s pretty much foundational to whatever we have built, and while we always cater to being a payments container… what we realized is that the least common denominator for the country when it comes to payments has to be direct debit from a bank account. And having a unified broking layer on top of that is a once in a lifetime opportunity,” Chari explained.
Automation and Scalability
PhonePe has heavily invested in automation, enabling it to handle approximately 270 million transactions daily. “In terms of tickets that get raised and the number of tickets that get matched through automation, we are at 96% success rate,” Chari noted.
As technology becomes more ubiquitous and standardized, Chari believes that the main differentiator lies in performance and scalability. “At the rate technology is getting commoditized and expanding with AI and more… my personal belief is that the true IP (intellectual property) or differentiator becomes purely performance and scale. Our IP is to be able to continue to deliver the level of performance that we deliver, keep improving it, while we are operating at population-level scales,” he proclaimed.
In conclusion, PhonePe’s approach to leveraging technology and design thinking to serve a diverse and vast population is a testament to its success. By prioritizing consumer choice, community feedback, and robust infrastructure, the company continues to innovate and scale effectively in the rapidly evolving fintech landscape.
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