PhonePe records a 60% increase in active seller ratio

PhonePe, India’s largest digital payments platform, has made significant progress on the profitability front, with contribution margin remaining stable, while indirect costs fell from 173 percent of revenue to 100 percent in FY25, as it reaped the benefits of operating leverage, as per Bernstein’s pre-IPO Research Report.

PhonePe has seen healthy revenue growth led by improved monetization, illustrated by the rising Revenue to Total Payment Volume ratio. The increasing share of non-payment revenues has contributed to the trend of improved monetization, the report said. This trend led to EBITDA and PAT margins improving between FY23 and FY25, with the company generating positive operating cash flow in FY’25.

The ratio of daily active sellers to monthly active sellers has increased from 44 percent in FY23 to 60 percent in H1FY26. The surge in installed payment devices (smart speakers and EDC machines) has likely helped drive better engagement, the report said.

Overall, healthy growth in GMV (from Rs. 7,710 crore to Rs. 14,770 crore in FY25 and Rs. 8,221 crore in the first half of FY’26) and improved monetization have put PhonePe on a profitability trend, which has taken a pause in the first half of FY’26 due to revenue headwinds due to regulatory measures, Bernstein said.

With over 23 crore monthly active users, PhonePe has one of the largest user bases in the financial services industry and even among broader consumer digital platforms. It processes $1.8 trillion in annual payments value, placing it alongside the global payments giants. The scale was determined by the dominant 49 percent market share in UPI, India’s highly successful digital payment systems.

Published on February 5, 2026