Fintech – PhonePe’s Expanding Merchant Network Revealed Ahead of IPO Filing
Fintech – As PhonePe Ltd moves closer to launching its initial public offering, newly disclosed information in the company’s updated draft red herring prospectus provides a detailed look at the scale of its merchant operations. The filing highlights how the digital payments platform has built a vast commercial network that now functions as a major revenue generator. What was once viewed primarily as a free payment solution for businesses has evolved into a large and structured ecosystem serving millions of merchants across the country.
Merchant Network Covers Nearly Entire Indian Market
According to documents submitted to the Securities and Exchange Board of India, PhonePe has established an extensive presence across India. By September 30, 2025, the platform had registered approximately 47.19 million merchants. This network spans about 98.61 percent of all postal pin codes in the country, indicating that the company’s services are available in almost every region.
The filing also notes that as of March 31, 2025, PhonePe’s merchant base represented roughly 77 percent to 80 percent of India’s total trade and services merchant population. Such wide coverage reflects the rapid adoption of digital payments among small businesses, retail outlets, and service providers across both urban and rural markets.
Strong Engagement Among Active Merchants
Beyond its large merchant base, PhonePe’s documents highlight growing engagement levels on the platform. In March 2025, the company reported around 11.31 million monthly active merchants. This figure accounted for nearly 54 percent of all active merchants using the Unified Payments Interface nationwide.
Daily activity levels among merchants have also shown consistent growth. By September 2025, the proportion of daily active merchants had increased to 60.77 percent of monthly active users. This represents a significant rise compared with March 2023, when the figure stood at 44.18 percent.
The increase suggests that businesses are relying more heavily on digital payment systems for everyday transactions, making such platforms a routine part of commercial operations.
Physical Devices Strengthen Merchant Services
A key component of PhonePe’s business strategy lies in its large network of payment devices deployed across merchant locations. The company currently operates approximately 9.19 million devices, including tools such as SmartSpeakers that confirm payment notifications for shop owners.
These devices serve more than just payment verification. They also act as communication channels through which merchants receive alerts, updates, and business-related information. This infrastructure has helped PhonePe build long-term relationships with businesses while generating recurring subscription-based revenue.
Maintaining this widespread network requires significant operational support. The company has deployed more than 25,000 field team members along with over 31,000 commissioned agents. Many of these representatives focus on expanding services in smaller towns and rural regions where digital payment adoption continues to rise.
Merchant Lending Emerges as Fastest Growing Segment
One of the most notable developments outlined in the filing is the rapid expansion of PhonePe’s merchant lending services. The company has been partnering with financial institutions to offer credit solutions tailored for small businesses using its platform.
Loan disbursements have grown sharply in a short period. From just Rs 0.11 billion in financial year 2023, merchant lending volumes climbed to Rs 45.07 billion by financial year 2025. The pace of growth has continued into the current financial year.
In the first half of financial year 2026 alone, lending-related revenue reached Rs 2,880.87 million. This already accounts for nearly 88 percent of the revenue generated from the segment during the entire previous financial year.
Merchant Payments Continue to Drive Revenue
Despite the rapid growth of lending services, merchant payments remain a major contributor to the company’s earnings. In financial year 2025, the merchant payments segment generated revenue of Rs 19,910.36 million. This represented close to 28 percent of PhonePe’s total operational revenue.
The company’s payment infrastructure processes a large volume of transactions annually. Merchant Total Payment Value handled through the platform has reached approximately Rs 15 trillion per year. By building financial services on top of its payment network, PhonePe has gradually transformed its digital infrastructure into a broader financial platform for businesses.