 "Support to regulations difference between us and tech firms: Sameer Nigam")
The comfort around being regulated is a key difference between PhonePe and big tech firms, Sameer Nigam, founder and chief executive officer, said on Monday.
In a fireside chat with Business Standard's Editorial Director A K Bhattacharya at the Business Standard BFSI Insight Summit 2023, Nigam said that an important factor is the deployment of people on the ground.
"PhonePe deployed around 1,50,000 freelancers in rural India to get QR code everywhere. We have around 10,000 people on roll, and 20,000 on a permanent contract.''
He added, ''Money is critical. Hence, it is important to put people on ground. I don't think big tech companies are comfortable putting so many people on the ground.''
On strict regulations, Nigam said, ''PhonePe is heavily regulated. It's an obvious outcome of the nature of the sector that we are in. We spent billions of dollars in tax money to move our domicile from Singapore to India.''
He added: "We are a lot more comfortable being regulated, we actually welcome regulation. Well-established big tech has always resisted regulations."
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He added, "You can't get to 2 billion people on chat clients and social media and then have an operation of any kind. Sending money is not like sending social media posts. So, you have to put people on the ground."
Nigam also said that being an early mover in the adoption of the United Payments Interface (UPI) played in their favour.
On defending their platform against the apps of banks, Nigam said that he is confident in the PhonePe app. "Every time I hear a fintech which's saying I want to become a lender, I laugh. You are not going to become a bank overnight, it takes a tonne of work and discipline and governance and skills," he said.
On working with the National Payments Corporation of India (NPCI), he said, ''At nearly 50 per cent of market share, we work closely with the NPCI in institutionalizing the right practices and SOPs. We get audited more than once a week, that's over 55-60 times a year.''
On being asked that the NPCI has put out a paper which suggested that by 2024, the market share for digital payment players will be capped at 30 per cent, Nigam said, ''I have already asked questions but they have gone unanswered. One, tell me what I should do to reduce my market share. Second, if there are 600 million people left, do you want to tell them not to use my app? This burden should not fall on us.''
He added, ''At some level, they want the market to have more participation. So, many new entrances will be seen. As long as there is no barrier to entry, there is no demonstration of abuse of dominant share.''
On being asked if the Indian regulators ask PhonePe to split the company into two due to high market share, Nigam said, ''I can think about this but we'll see when we reach that point. I can only focus on governance and good practices.''
He added: ''This industry is concerned about the business viability and it's a low-margin industry. There is no barrier to UPI, anyone can create a UPI app.''
On the app's name "PhonePe", Nigam said, "We could not agree on what the reason of existence was. But we knew there were some payments in that. We said let's not put a boundary on the canvas and we'll call it anything that's on the phone. So, it's literally stemming from 'anything that's on the phone'."
Nigam said that the company's IPO may be launched in the next couple of years.