According to reports, UPI payment major PhonePe is toying with the idea of foraying into the ferociously competitive space of stockbroking. As per business daily The Economic Times, PhonePe is currently awaiting the stockbroking license from capital market regulator SEBI.
PhonePe’s unconfirmed plan to enter the stockbroking biz makes a lot of sense given that today it owns a pole position in the lucrative UPI payment market. Barely two weeks back, the Walmart-owned company became the first UPI payment player to cross 1 Bn transaction and is now a market leader with 42% market share, followed by Google Pay at 36% while Paytm remains a distant third player in the market.
For PhonePe it is an enticing idea to exploits its roughly 250 Mn customer base in India for increasing its revenue channels. Out of these 250 Mn customers, young customers with average age swinging between 25 to 40 supposedly make a big chunk of PhonePe’s customer base. These young customers make an attractive demography as they not only boast higher disposable income but are spurred by their matristic aspirations.
Paytm Money had entered into the stockbroking biz few months with a partially similar strategy of going after the young demography. To top it off, in the long run Phonepe may pursue Paytm’s strategy of becoming a full-stack wealth management company. It must be noted that the Walmart-owned UPI payment major already sells third-party insurance products on its platform and the idea of enlarging its financial services seems to be a logical step now for most UPI players.
Speaking particularly about stockbroking biz then it is a ruthlessly competitive space where bootstrapped startup Zerodha has acquired a dominating position. The other high-profile players in the market include Upstox and Groww, both of which are backed by Tiger Global and the latter having acquired the coveted unicorn status only last week.
Analysts argue that most of these new online stockbroking players don’t pose any major threat to traditional brick and mortar stockbroking firms. Mainly because they chase a different demography or customer base and are too well entrenched in the industry to feel any competitive pressure from the likes of Zerodha or Upstox.