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PhonePe's 47M Merchant Empire Powers Multi-Billion Rupee IPO Engine

PhonePe's updated draft red herring prospectus reveals a merchant network of 47.19 million businesses, covering 98.61% of India's pin codes. The platform has successfully monetized this base, with merchant payments generating nearly 28% of its total operational revenue. A key growth driver is merchant lending, where disbursals exploded from Rs 0.11 billion in FY2023 to Rs 45.07 billion in FY2025. This vast ecosystem, supported by millions of physical devices and a large field force, positions PhonePe as a dominant financial services platform beyond just payments.

Key Points: PhonePe's 47M Merchant Network & Revenue Revealed in IPO Filing

  • 47.19M registered merchants
  • 98.6% pin code coverage
  • Merchant lending revenue soars to Rs 2,880.87M
  • 9.19M physical devices deployed
  • 28% of revenue from merchant payments
2 min read

PhonePe's merchant network hits 47 million businesses; DRHP reveals diversified monetisation

PhonePe's DRHP shows 47M merchants, 98.6% pin code coverage, and booming lending revenue as it builds a financial services giant ahead of its IPO.

"Far from being a 'free' service, the company's merchant infrastructure has evolved into a multi-billion rupee revenue engine - DRHP Analysis"

New Delhi, March 6

As PhonePe Ltd prepares for its initial public offering, disclosures in its updated draft red herring prospectus shed light on the massive scale and sophisticated monetisation of its merchant ecosystem.

Far from being a "free" service, the company's merchant infrastructure has evolved into a multi-billion rupee revenue engine powered by 47 million businesses and millions of physical payment devices.

The data filed with the Securities and Exchange Board of India (SEBI) reveals that PhonePe has achieved near-total coverage of the Indian market:

As of September 30, 2025, PhonePe's registered merchant base reached 47.19 million, covering 98.61 per cent of all pin codes in India. As of March 31, 2025, this base represented between 77 per cent and 80 per cent of India's total trade and services merchant population.

Monthly active merchants stood at 11.31 million in March 2025, accounting for approximately 54 per cent of all active UPI merchants in the country.

Daily active merchant engagement rose significantly to 60.77 per cent of monthly actives by September 2025, up from 44.18 per cent in March 2023.

PhonePe's physical footprint is a key driver of "sticky" subscription revenue. The 9.19 million devices currently deployed serve as more than just payment tools; the Smartspeaker acts as a communication medium, delivering business updates and alerts to merchants. This hardware network is maintained by a massive field force of 25,657 team members and over 31,000 commissioned agents focused on rural expansion.

Perhaps the most rapid growth area identified in the DRHP is Merchant Lending. By leveraging transaction data from its 47 million merchants, PhonePe provides credit insights to partner lenders for collateral-free loans, according to its IPO papers.

Loan disbursals skyrocketed from Rs 0.11 billion in FY2023 to Rs 45.07 billion in FY2025. Lending revenue reached Rs 2,880.87 million in just the first half of FY2026, already totalling nearly 88 per cent of the previous full year's earnings.

The Merchant Payments segment alone generated Rs 19,910.36 million in revenue in FY2025, accounting for nearly 28 per cent of PhonePe's total revenue from operations. With Merchant Total Payment Value (TPV) reaching Rs 15 trillion annually, the company has successfully converted its vast payment rails into a high-value financial services platform.

- IANS

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Reader Comments

S
Sarah B
The scale is mind-boggling. 47 million merchants is almost the entire market. As an investor watching this IPO, the monetization strategy through lending and subscriptions looks very solid. The jump from ₹0.11bn to ₹45bn in loan disbursals in two years is explosive.
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Priyanka N
While the growth is impressive, I hope they maintain focus on the user and merchant experience. Sometimes the push for monetization can lead to too many ads or complicated interfaces. The strength is in its simplicity – don't lose that.
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Aman W
The rural expansion with 31,000+ agents is the real story. Bringing digital payments and credit to the smallest shops in remote areas is transformative. My uncle's tea stall in a village now runs entirely on UPI because of their on-ground support. Big thumbs up!
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Karthik V
₹15 trillion TPV annually! That's the power of UPI and India's digital public infrastructure. PhonePe has built a fantastic ecosystem on top of it. The lending revenue figures show they've successfully moved from being a payment app to a full-scale financial platform. Exciting times for the IPO.
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Meera T
As a small business owner, the collateral-free loans based on transaction history are a lifesaver. Traditional banks would never look at us. PhonePe's data is creating a new credit system for India's millions of small merchants. This is true financial inclusion. 🙏

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