Money transfers via UPI, recharges and utility bill payments are among Phone Pe’s most popular categories of payment modes of its users. The digital wallet and online payment company, has also seen an uptick in payments made at offline stores using the PhonePe QR for groceries, medicines and other essential items. Financial services categories such as gold, mutual funds and insurance, too are witnessing a surge in growth and traction on the platform, with many first-time users investing in them.
In a candid conversation, Achal Ananth, Head of Analytics, PhonePe, informs that currently, they have over 300 million registered users and over 20 million offline merchants across the country. Being on the top of analytics in the organisation, he gives a 360 degree view of the potential of data, AI and analytics and its implications and implementation in the company at large. Excerpts:
What is the role of data analytics in the payments domain?
The primary role of analytics is to measure and track the performance of the business. The efficiency of this function determines how quickly businesses can get answers to movements in key business metrics.
Since day one, PhonePe has had a real-time data tracking platform. The focus on real-time tracking and measuring mechanisms with the forethought of systems being scalable to handle billions of records of data in real-time has set us apart. It has helped the business make important decisions quickly.
Additionally, analytics helps discover useful information from data and suggests insights to drive business decision-making. We leverage insights from data to identify issues users face when they make payments and thereby improve the success rate of payments. Moreover, we use advanced analytics to find patterns in data to identify fraud and reduce risk.
Can you share examples of analytics impacting business decisions as per customers, merchants, partners, products, etc.?
We use analytics to drive both tactical and strategic decision-making.
For customers: We use customers’ payment actions to improve payment success rate and experience. For example, with PhonePe seeing greater adoption in remote corners of India, it is important to identify where users might need more information to improve the payment experience. We use data of customers’ transaction behaviour across various use cases to identify user preferences and make relevant suggestions.
For products: Our product launches are highly data-driven. We first launch to a small cohort of users, test and measure each interaction and step of the funnel to fine-tune the product or feature. Furthermore, we combine market and industry data with internal data to drive product decisions.
For Merchants: A continuous data-driven merchant acquisition strategy is behind PhonePe’s acceptance at over 20 million merchants across the country today. While merchant acquisition is the first step, we use data to improve engagement with merchants.
What is the role of emerging technology and tools in analytics and what major trends do you see in future?
A decade ago, the world saw a huge explosion in data captured with Big Data becoming common parlance in the field of analytics. Initially, companies addressed this problem by taking the approach of working with representative samples of data. But, with new technologies emerging such as Hadoop, large datasets ranging in the size of gigabytes and petabytes could be processed more efficiently. This has led to a lot of organisations (including PhonePe) to first focus on data engineering and ensuring that all the data captured is available for consumption.
Analytics is a technology-driven function. Hence, it is very important for analysts and organisations to leverage the latest technologies. Application of technology is changing fast, particularly for better data management, faster processing of data and more agile Business intelligence (BI) tools for data consumption.
We have invested significant time and effort towards our data engineering initiatives to build a robust and scalable data warehouse that serves as the single source of truth for all data. All the data captured is ingested real-time into our data warehouse. This has helped us achieve an enhanced business intelligence solution. BI in PhonePe covers end-to-end automation of business metrics and performance via many dashboards and reports. This enables business stakeholders to be self-sufficient to track their respective areas in real-time.
The next part of data consumption is the organisation’s ability to process large amounts of data reliably and efficiently. This has led to the emergence of database query engines and software such as Google BigQuery, AWS, Cloudera, Snowflake etc for ETL(Extract, Transform and Load) and faster processing of Big Data. In PhonePe, we leverage Apache Tez but open source technologies need more development and also the deployment and maintenance are more complex.
The processed and aggregated data is then connected to BI tools for business data consumption and decision making. BI tools are evolving with capabilities such as statistical modeling, AI algorithms to discover patterns in data and more sophisticated UI/UX with better visualisations.
Our goal at PhonePe is to make each employee data-savvy. Instead of scaling the analytics team to deal with complex problem statements, we plan to make tools and technologies for analytical problems more accessible to business stakeholders.
What are the hiring plans for the Analytics team specifically and for PhonePe overall?
The Analytics team’s growth in PhonePe is a function of our business growth. Naturally, the team will grow to support new areas and use-cases. Access to data and converting data to information for business use is covered via automation and our business intelligence solutions. Hence an analyst in PhonePe spends little or no time providing data but focuses on adding value by converting information to insights and conclusions through complex data analyses to drive business decisions.
At an organisation level, we continue to hire aggressively across functions. We plan to grow to 2800 employees by the end of the year from 2400 currently.
What are PhonePe’s future plans?
We aim to continue growing all parts of our business, by adding more use cases to the PhonePe app, increasing our acceptance at offline stores and offerings for merchants while also enhancing our financial services offerings across insurance, mutual funds and gold.
Going forward, digital payments will have to be a lot more inclusive and ‘Bharat’ will genuinely play an important part in this growth. Our challenge is to build offerings for a billion Indians who have the means to transact but either don’t know or don’t understand digital payments. In order to serve a billion Indians in a truly inclusive manner, we will need to experiment and build new user experiences and interfaces, build awareness via innovative marketing formats and continue to retain a razor-sharp focus on being customer and use-case driven.