How to Improve PhonePe: A Simple Guide to Boosting Retention and Engagement

Vibha Sharma
May 3, 2025
4 min read

If you’ve ever scanned a QR code at a chai stall, chances are you’ve used PhonePe. It’s become a go-to payments app for millions in India — from cities to small towns. In fact, it handles nearly half of all UPI transactions in the country.

But in the fast-moving world of fintech, just being big isn’t enough. The real game is about keeping users coming back, again and again. Let’s take a closer look at how PhonePe can do that — and what other fintech startups can learn from it.

PhonePe Today: Big, But Not Unbeatable

600 million+ users
47% market share of UPI payments
20 crore active users monthly
Top player in bill payments, recharges, and merchant QR usage

Sounds unbeatable? Not quite. People have options — Google Pay, Paytm, Amazon Pay — and they switch fast if something feels off.

Where Users Struggle

Even the best apps have pain points. Here’s what can trip users up on PhonePe:

Problem	Why it matters
Payment failures & downtime	Trust breaks quickly if money doesn’t go through.
Too many features, cluttered UI	Users get confused and bounce. Simpler is better.
Long onboarding / wallet steps	If adding money is hard, many give up and don’t return.
No reason to return	Without rewards or nudges, users don’t build habits.

What Rivals Do Well

Google Pay: Clean UI + fun rewards (scratch cards, festive games)
Paytm: Strong merchant network + full-stack super-app
CRED: Turns payments into a premium, gamified experience

They all focus on emotion and behavior, not just tech.

What PhonePe Should Do Next

1. Make the App Super Easy to Use

Imagine opening PhonePe and finding exactly what you need in seconds. A smoother app keeps users happy. Here’s how PhonePe can do it:

Clear Layout: Divide the app into four main sections—Payments, Bills, History, and Profile—so users don’t get lost.
Quick Pay Button: Add a big “Instant Pay” button at the bottom-right corner. Tap it, enter a number, and you’re done!
Swipe for Speed: Let users swipe right to scan a QR code for payments, making things faster.
Save Contacts: Let users save frequent contacts (like a friend or shop) for quick payments next time.

These changes make the app feel like a breeze to use, encouraging users to open it again and again.

2. Add Cool New Features

To stand out from Google Pay, PhonePe can add unique features that users love. Here are some ideas:

Group Savings: Let friends create a savings pool for a trip or party. Everyone chips in, and it’s fun to track together.
Smart Money Tips: Use AI to give users simple advice, like “You spent a lot on food—here’s a budget plan.”
Budget Tracker: Help users see where their money goes and set goals, like saving for a phone.

These features make PhonePe more than just a payment app—it becomes a money buddy!

3. Reward Users to Keep Them Excited

Everyone loves a good deal. PhonePe can keep users engaged with rewards and personal touches:

Cashback Program: Give users small cashbacks for paying bills or shopping often, like 5% back on 10 transactions a month.
Fun Challenges: Create in-app games, like “Pay 5 bills this week to unlock a surprise discount.”
Personal Offers: Send users deals they care about, like a discount on their favorite coffee shop, but don’t spam them!

These rewards make users feel special and keep them coming back for more.

4. Bring Back Inactive Users

Some users stop using PhonePe after a while. Here’s how to win them back:

Special Offers: Send inactive users a one-time cashback deal, like “Pay a bill today and get ₹50 back.”
Ask for Feedback: Send a quick survey to understand why they left and fix those issues.
Smart Reminders: Gently remind users about unpaid bills or new features with friendly notifications.

This shows users that PhonePe cares about them, making them want to return.

How Will This Help PhonePe?

If PhonePe tries these ideas, here’s what could happen:

More Active Users: From 150 million monthly users now, PhonePe could reach 180 million by 2025.
Happier Users: A simpler app and fun features could make users stay longer, maybe even beating the usual 5% retention rate for apps after 30 days.
More Transactions: With better rewards and offline shop support, users might make over 600 million transactions a month at stores.
Stay Ahead: Cool features and a great experience will keep PhonePe ahead of Google Pay and PayTM.

How to Make It Happen

PhonePe can roll out these changes step by step:

First 3 Months: Redesign the app with a clear layout and quick pay button. Test a cashback program in a few cities.
Next 3-6 Months: Launch group savings and budget tools. Expand the cashback program across India.
6-12 Months: Add AI money tips and grow offline shop support. Keep asking users what they think to make the app even better.

Challenges to Watch Out For

Users might need time to get used to a new app design.
Too many notifications could annoy users, so they need to be just right.
Building AI tools or new features costs money, so PhonePe needs to plan carefully.

Wrapping Up

PhonePe is already a leader in India’s payment world, but it can shine even brighter. By making the app easier to use, adding exciting features like group savings, rewarding users with cashbacks, and bringing back inactive users, PhonePe can keep users hooked. These simple changes could grow its user base, boost transactions, and make sure it stays India’s favorite money app. Let’s see how PhonePe takes these ideas and runs with them!