How Google Pay and PhonePe earn revenue despite providing free transactions

In fact, UPI-based payments are just a small part of their business. Their main sources of income are different and not always visible to regular users. Let’s take a closer look at their business model.

New Delhi: In today's digital world, most people use apps like Google Pay or PhonePe to make daily payments. There is no charge or fee for each transaction. But have you ever wondered how these companies, which offer their services almost for free, made more than Rs 5,065 crore last year?

In fact, UPI-based payments are just a small part of their business. Their main sources of income are different and not always visible to regular users. Let's take a closer look at their business model.

Crores Earned From Voice Speakers

If you've ever heard a message like "Rs 100 received on PhonePe" at a shop, it's not just a notification—it's a way to make money. Companies like PhonePe and Paytm rent these voice speakers to shop owners. Around Rs 100 is collected as rent from shopkeepers every month.

More than 50 lakh shops across the country are using these speakers.
If we do the math:

Rs 100 × 50 lakh = Rs 50 crore per month

Which equals Rs 600 crore per year.

Just one service generates so much revenue. These speakers not only confirm payments but also help build the brand's credibility.

Advertising For Brands

Scratch cards are another big source of money for digital payment apps. Whenever you make a payment, you might get a cashback or a discount coupon. These rewards attract users, but the real income comes from the brands. Brands pay a lot to these companies to promote their products through these scratch cards. This increases brand engagement, and the digital payment companies earn huge revenue from advertising.

Loans And SaaS Services

Nowadays, apps like Google Pay and PhonePe are not just for payments. They have become complete business solutions for small businesses. These apps also offer features like GST reporting, invoicing, and especially small loans. Users who use UPI also start using other services like loans, bill payments, and mobile recharges. In return, these companies make good money through platform fees and interest from loans.

Set Up Your UPI app

• Dowbload and install a UPI app like Google Pay, Paytm, or BHIM.
• Register your mobile number linked to your bank account, and link your bank account within the app.
• Create a unique UPI PIN (usually 4-6 digits) for transaction authorization.
• Enter the recipient's unique UPI ID (e.g., username@bankname).
• Else you can use the app's scanner to scan the recipient's UPI QR code and enter the amount.
• Enter your UPI PIN to authenticate the transaction.Review the details and confirm the payment.