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PhonePe, Google Pay & Paytm profit via merchant speaker rentals (₹360cr/yr), scratch card ads, SaaS tools for SMEs, and selling transaction data insights – all while keeping UPI free for users. Their multi-source model earned ₹5065cr last year.
Representational Image (Image Source: Internet)
New Delhi: In today's era, digital payment apps like Google Pay and PhonePe have made our lives easier. Despite providing these services to users absolutely free of cost, these companies earned more than Rs 5065 crore last year. The question arises that when they neither sell any product nor charge for transactions, then how do they earn profit?
Grocery stores make huge profits.
The biggest secret of these apps is hidden in small grocery stores. These companies give shopkeepers 'voice-operating speakers' on rent for Rs 100 per month, which confirms the payment with a voice like "100 rupees received on PhonePe" on every transaction. Companies earn Rs 360 crore annually from these speakers installed in about 30 lakh shops.
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Game of Scratch Cards
These apps also offer scratch cards with cashback and discount coupons. This is not just a means of attracting users, but big brands also pay a good fee to the apps by printing their advertisements on these cards. In this way, companies get a double benefit—user engagement and income from advertising.
SaaS and Loan Services
They have not kept UPI only as a payment tool but have started 'Software as a Service' (SaaS) and loan services for small businesses. These companies are earning additional income by providing facilities like inventory management, business loans, and digital bookkeeping to shopkeepers.
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Data and Marketing
The data obtained from every transaction is like gold for these apps. By analyzing the shopping habits of users, these companies sell targeted marketing services to big brands, earning huge profits.
Business model based on innovation
These digital companies have a well-thought-out strategy behind their "free" services. They earn profits from multiple sources like speaker services of grocery stores, scratch cards, SaaS platforms, and data marketing.
This is the reason why these companies are able to do a turnover of thousands of crores without charging any fee from the users. In the coming time, as digital payments increase, new ways of earning will also emerge for them.
