{"id":1286567,"date":"2024-10-22T08:03:43","date_gmt":"2024-10-22T02:33:43","guid":{"rendered":"https:\/\/trak.in\/stories\/?p=1286567"},"modified":"2024-10-22T10:28:50","modified_gmt":"2024-10-22T04:58:50","slug":"phonepe-fires-600-customer-support-executives-replacing-them-with-ai","status":"publish","type":"post","link":"https:\/\/trak.in\/stories\/phonepe-fires-600-customer-support-executives-replacing-them-with-ai\/","title":{"rendered":"PhonePe Replaced 600 Customer Support Executives With AI In 5 Years"},"content":{"rendered":"\n<p>Walmart-backed fintech giant PhonePe has taken significant steps to trim its expenses and narrow losses. According to its FY24 annual report, the company reduced its customer service team, scaled back cashbacks, and leveraged AI-driven chatbots to resolve most customer queries. These cost-saving measures helped reduce its net loss by nearly 30%, from \u20b92,795 crore in FY23 to \u20b91,996 crore in FY24.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/trak.in\/stories\/wp-content\/uploads\/2024\/10\/DSC_1410-1280x720-1-1024x576-1.jpg\" alt=\"PhonePe Replaced 600 Customer Support Executives With AI In 5 Years\" class=\"wp-image-1286572\" srcset=\"https:\/\/trak.in\/stories\/wp-content\/uploads\/2024\/10\/DSC_1410-1280x720-1-1024x576-1.jpg 1024w, https:\/\/trak.in\/stories\/wp-content\/uploads\/2024\/10\/DSC_1410-1280x720-1-1024x576-1-300x169.jpg 300w, https:\/\/trak.in\/stories\/wp-content\/uploads\/2024\/10\/DSC_1410-1280x720-1-1024x576-1-768x432.jpg 768w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Customer Service Reduction and AI Integration<\/strong><\/p>\n\n\n\n<p>PhonePe reduced its customer service team by 60% over the last five fiscal years, bringing the number of agents down from <a href=\"https:\/\/www.financialexpress.com\/business\/banking-finance-phonepe-reduces-customer-service-team-cashbacks-to-cut-losses-3645918\/\">1,100 to just over 400<\/a>. The company has replaced human agents with AI-driven chatbots, which now resolve over 90% of customer issues. This automation significantly lowered operating costs without impacting customer satisfaction, according to PhonePe.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Scaling Back Cashbacks and Incentives<\/strong><\/p>\n\n\n\n<p>In FY24, PhonePe reduced the cashbacks and payment transaction incentives offered to users to \u20b915 crore, a dramatic decrease from \u20b9950 crore in FY19. This move is part of the company&#8217;s broader strategy to trim unnecessary expenses and improve profitability, as the fintech sector increasingly focuses on sustainable growth.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Revenue Growth and ESOP Costs<\/strong><\/p>\n\n\n\n<p>Despite reducing expenses, PhonePe&#8217;s revenue from operations surged by 74%, reaching \u20b95,064 crore in FY24. However, Employee Stock Ownership Plan (ESOP) costs remain a significant financial burden. The company reported ESOP expenses of \u20b92,193 crore, exceeding employee salaries and contributing to PhonePe&#8217;s overall losses. Excluding ESOP costs, PhonePe would have reported a net profit of \u20b9197 crore.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Government Subsidies and Rising Income<\/strong><\/p>\n\n\n\n<p>PhonePe also benefits from government subsidies, which account for 10% of its revenue. These subsidies compensate banks and fintechs for the removal of the Merchant Discount Rate (MDR) on UPI transactions, a measure introduced to boost digital payments. Additionally, PhonePe\u2019s other income, including interest, grew fourfold to \u20b9661 crore in FY24.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Conclusion: A Step Toward Profitability<\/strong><\/p>\n\n\n\n<p>PhonePe&#8217;s strategy to cut costs and streamline operations is yielding results. By reducing customer service expenses, scaling back cashbacks, and increasing revenue, the company is on a path toward sustainable growth. However, ESOP costs continue to be a challenge, and PhonePe will need to balance its growth with managing these ongoing expenses.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Walmart-backed fintech giant PhonePe has taken significant steps to trim its expenses and narrow losses. According to its FY24 annual report, the company reduced its customer service team, scaled back cashbacks, and leveraged AI-driven chatbots to resolve most customer queries. These cost-saving measures helped reduce its net loss by nearly 30%, from \u20b92,795 crore in [&hellip;]<\/p>\n","protected":false},"author":30,"featured_media":1286572,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[359],"class_list":["post-1286567","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-phonepe"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>PhonePe Replaced 600 Customer Support Executives With AI In 5 Years - Trak.in - Indian Business of Tech, Mobile &amp; Startups<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/trak.in\/stories\/phonepe-fires-600-customer-support-executives-replacing-them-with-ai\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"PhonePe Replaced 600 Customer Support Executives With AI In 5 Years - Trak.in - Indian Business of Tech, Mobile &amp; Startups\" \/>\n<meta property=\"og:description\" content=\"Walmart-backed fintech giant PhonePe has taken significant steps to trim its expenses and narrow losses. 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