Collective Effort, Open Approach and Deep Partnerships are crucial to achieving scale: Rahul Chari, Co-founder & CTO, PhonePe
The digital payments revolution has transformed our lives and societies with unprecedented speed and
scale, delivering immense opportunities as well as daunting challenges. The rapid user adoption has
increased the demands on technology for speed, reliability, and privacy. And while companies in the
digital payments space are working toward providing a seamless experience to their customers, PhonePe
has been ahead of the curve.
In this edition of the PhonePe Pulse Beat of Progress conversation series, Chandra from CNBC TV18 caught
up with Rahul Chari, Co-Founder & CTO, Phonepe on how technology has been and will continue to be a game
changer for the industry. Here is an excerpt from the conversation:
Built for billion from day one:
Talking about the guiding principles that supported tech decisions on the design and architecture of the
platform, Rahul explained how PhonePe was built for a billion-population scale from day one. He said,
“An over-engineering approach was deployed to build our core stacks, payment stacks, accounting, risk
and fraud stacks where we were building for millions of transactions to be conducted on our platform on
a daily basis”. He further added that the phenomenal pace of UPI’s growth does not offer the luxury of
time, thus a robust future provisioning approach is essential.
As the Indian digital payments market is set to touch US$10 TN by 2026, Rahul emphasized that a
collective effort, an open approach, and a deeper partnership model within the ecosystem will be key to
backing this growth. He highlightedcthat Pulse is an extension of PhonePe’s open platformcapproach with
the view of democratizing access to digital payments data for the benefit of other stakeholders in the
ecosystem.
PhonePe’s digital infrastructure:
PhonePe has built well-entrenched infrastructure systems that enable large volumes of transactions
daily.Based on a cost-effective CAPEX model, Rahul explained how they have prudently chosen to own data
centres vis-à-vis hosting on a public cloud that has helped synchronize and control operational
efficiencies end-to-end.The infrastructure has been built to scale, backed by more than 200,000 cores of
computing power, and manages nearly 10 Petabytes of storage capacity. To support the explosive growth,
PhonePe has deeply invested in powerful servers enabled by alternative cooling methods such as Liquid
Immersive Cooling (LIC) and Direct Contact Liquid Cooling (DCLC) instead of the typical air-cooled
servers.
He further elaborated that technology plays a crucial role in ensuring a seamless customer experience.
Sharing that 92% of customer tickets generated are resolved through tech in the first go, he also
highlighted that PhonePe’s systems are built on a preventive approach. A prime example of preventive
approach is the Kill Switch mechanism. Kill Switch has been devised based on predictive logic with the
ability to respond within 3 to 4 milliseconds to avoid payment anomalies. A judicious mix of a
user-friendly interface, preventive approach, guidance mechanisms, and automation have ensured that the
app is able to cater to a diverse diaspora of 1 BN users across the country.
Exciting times ahead for the digital payments industry:
Rahul opined that ONDC (Open Network for Digital Commerce) is set to challenge and give a makeover to
local and hyperlocal commerce. Besides ONDC, he shared that the Account Aggregators (AA) will open
flow-based credits which will provide impetus to MSME markets and B2B businesses while the Digital rupee
will accord traceability and efficiency to money management. In addition to the opportunities, he also
spotlighted the need for making the Fintech ecosystem sustainable so that the players in the ecosystem
can invest significantly to drive further growth. He believes that while policies have been progressive,
they need to be designed with a dual purpose of augmenting efforts and at the same time being
restrictive of malpractices. Concluding on an enthusiastic note, Rahul shared that players need to be
cognizant of the governance, regulation, and institute evolved risk management practices to achieve the
ambitious scale of US$10 TN.