PhonePe’s merchant network cross 47 million businesses ahead of IPO

As PhonePe prepares for its Initial Public Offering (IPO), disclosures in its updated Draft Red Herring Prospectus (DRHP) shed light on the massive scale and sophisticated monetization of its merchant ecosystem. Far from being a “free” service, the company’s merchant infrastructure has evolved into a multibillion-rupee revenue engine powered by 47 million businesses and millions of physical payment devices.

A merchant network at population scale

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

• Registered base: As of September 30, 2025, PhonePe’s registered merchant base reached 47.19 million, covering 98.61% of all pin codes in India.
• Market dominance: As of March 31, 2025, this base represented between 77% and 80% of India’s total trade and services merchant population.
• Active engagement: Monthly active merchants stood at 11.31 million in March 2025, accounting for approximately 54% of all active UPI merchants in the country.
• Daily intensity: Daily active merchant engagement rose significantly to 60.77% of monthly actives by September 2025, up from 44.18% in March 2023.

Hardware as a service: 9.19 million devices

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.

The lending dividend

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.

• Disbursal growth: Loan disbursals skyrocketed from Rs 0.11 billion in FY2023 to Rs 45.07 billion in FY25.
• Revenue impact: Lending revenue reached Rs 2,880.87 million in just the first half of FY26, already totaling nearly 88% of the previous full year’s earnings.

Financial outlook

PhonePe‘s digital payments app was launched in 2016. As of September 30, 2025, it has over 65 crore registered users and a digital payments acceptance network spread across over 4.7 crore merchants. The company’s products and services include Consumer Payments (including Digital Distribution Services), Merchant Payments, Lending and Insurance Distribution services, and New Platforms, which comprise Share.Market (stock broking and mutual funds distribution platform), and Indus Appstore (Android-based mobile app marketplace).

The Merchant Payments segment alone generated Rs 19,910.36 million in revenue in FY25, accounting for nearly 28% 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.