Its overhead expenses increased by 31% to Rs 7,756 crore in FY24 compared to Rs 5,907 crore in FY23. The expenses were mainly due to employee expenses, which in FY24 amounted to 3,603 crore compared to Rs 3,096 crore in FY23. Pay Processing charges for FY24, the costs that payment companies have to bear to settle digital transactions with banks, rose 74% to Rs 1,166 crore compared to Rs 667 crore a year earlier.
Sharing the details in its annual report for FY24, the Walmart-backed company said it reported a profit of Rs 197 crore in the last financial year, excluding employee share ownership costs, showing that its main operation. business has started to show profits.
PhonePe has adjusted its balance sheet with respect to cashback and incentive-based spending by spending just Rs 15 crore on payment incentives in FY24. In FY2019, at the height of the battle for refunds between Paytm, Google Pay and PhonePeThe Bengaluru-based startup had spent Rs 950 crore, he said.
PhonePe said multiple factors such as diversification of income streams through mutual fund distribution, credit and other measures have helped the company stabilize its revenue and show strong growth.
PhonePe is also creating revenue channels from its over 4 crore merchant base by selling sound boxes and point-of-sale machines. Currently, 10% of its total revenue comes from MDR-related incentives offered by the government, the company said.
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MDR, or merchant discount rate, is the cost merchants pay to payment processors in lieu of digital payment services. PhonePe has reduced its customer service team to about 400 agents compared to more than 1,100 five years ago. It has also automated 90% of customer queries, which has helped reduce overhead.
“We believe that focusing on disciplined financial management will help us continue to make progress towards profitability, especially in our payments business, which itself is a unique aspiration in the Indian context,” the company said.
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