The PhonePe Business Model of UPI Payments and Financial Products
How payments, merchant tools, lending and insurance fit together at PhonePe
Key Takeaways
- PhonePe's FY26 operating revenue was Rs 7,920.5 crore, up 11.5%.
- Its FY26 net loss was Rs 2,792 crore, up 62% from Rs 1,727 crore.
- FY26 total expenses were Rs 10,588.5 crore.
- SEBI approved its IPO on 20 January 2026, and PhonePe deferred it on 16 March 2026.
- PhonePe has over 70 crore registered users and over 5 crore merchants, as PhonePe says (April 2026).
The PhonePe business model is built around a UPI payments app that consumers use to pay and merchants use to get paid, with loans, insurance and investing offered inside the same app. In FY26 PhonePe reported operating revenue of Rs 7,920.5 crore, up 11.5% on the year before, and a net loss of Rs 2,792 crore.
This article explains how PhonePe makes money, where its costs sit and what has happened with its IPO.
PhonePe at a glance
| Detail | PhonePe |
|---|---|
| What it does | UPI payments app, merchant payment tools, lending and insurance distribution, Share.Market and Indus Appstore |
| App launched | 2016 |
| CEO | Sameer Nigam |
| Operating revenue (FY26) | Rs 7,920.5 crore |
| Net loss (FY26) | Rs 2,792 crore |
| Registered users (company figure) | Over 70 crore (April 2026) |
| Registered merchants | Over 5 crore (April 2026) |
| IPO | SEBI approval in January 2026; deferred in March 2026 |
What PhonePe does
PhonePe is a technology company that builds platforms for payments, digital distribution and financial services. Its products are consumer payments, merchant payments, lending and insurance distribution, and newer platforms such as Share.Market, a stock broking and mutual fund platform, and Indus Appstore, an Android app marketplace.
PhonePe says it has crossed 70 crore lifetime registered users and has over 5 crore lifetime registered merchants, as of April 2026.
How PhonePe makes money
PhonePe earned operating revenue of Rs 7,920.5 crore in FY26. Its products are consumer payments, merchant payments, lending and insurance distribution, and newer platforms such as Share.Market and Indus Appstore.
PhonePe's Business Model Canvas
The canvas puts the model on one page, from the people PhonePe serves to the partners and costs behind the app.
Is PhonePe profitable?
PhonePe reported a consolidated net loss of Rs 2,792 crore in FY26, compared with Rs 1,727 crore in FY25, a rise of 62%. Total expenses were Rs 10,588.5 crore against operating revenue of Rs 7,920.5 crore. The reported loss includes one-time items and ESOP expenses, and it is not simply total expenses minus operating revenue, because other income, exceptional items and discontinued operations also feed into it.
Revenue grew 11.5% in FY26. The real-money gaming ban and the stopping of credit card rent payments affected revenue during the year.
PhonePe's journey so far
| When | What happened |
|---|---|
| 2016 | Payments app launched |
| January 2026 | SEBI approval and updated IPO papers for an offer for sale |
| March 2026 | IPO deferred |
| April 2026 | 70 crore registered users |
| July 2026 | FY26 results published |
PhonePe IPO status
SEBI approved PhonePe's IPO on 20 January 2026, and the company filed updated draft papers for an offer for sale only, with Walmart, Tiger Global and Microsoft among the selling shareholders. Walmart planned to sell about 9% of the equity. On 16 March 2026 PhonePe deferred the IPO, citing geopolitical conflicts and market volatility. In September 2026 Inc42 reported, citing sources, that PhonePe is looking at a listing around February to March 2027, and PhonePe declined to comment.
Who PhonePe competes with
Google Pay is the other large UPI app, and Paytm, Navi and super.money are smaller UPI apps, going by NPCI data for April and May 2026.
Challenges PhonePe faces
The real-money gaming ban and the stopping of credit card rent payments affected revenue in FY26. NPCI's 30% cap on third-party UPI apps' share of volume is currently due by 31 December 2026, as of October 2026.
Conclusion on the PhonePe business model
PhonePe runs a UPI payments app for consumers and payment tools for merchants, and uses the same app to distribute loans and insurance and to offer investing. In FY26 it reported operating revenue of Rs 7,920.5 crore and a net loss of Rs 2,792 crore.
