PhonePe reduces customer support team by 60%, turns to AI

PhonePe has reduced its customer service workforce by 60%, leaning on AI-driven chatbots to handle the majority of customer queries, according to its FY23-24 annual report. The team dropped from 1,100 to just over 400, with automation now resolving over 90% of customer issues, driving efficiency and cost savings.

The shift to AI comes as part of a broader strategy to reduce operational costs while scaling transaction capabilities. PhonePe, however, maintains that this hasn't resulted in any layoffs of existing employees.

Despite the downsizing, PhonePe has seen its customer satisfaction improve, with its Net Promoter Score (NPS) increasing steadily over the past five years, as per the report. Since FY18-19, PhonePe's transaction volume has grown 40-fold, supported by its expanding technology infrastructure and cross-selling of financial services.

This change in number has happened over a five-year period, with PhonePe opting not to backfill positions vacated through attrition due to automation. PhonePe's automation strategy reflects a larger trend in fintech, where AI is replacing human agents to streamline operations without adding costs. 

The company also reported a 74% revenue increase for FY23-24, hitting INR 5,064 crore, alongside its first profitable year with an adjusted Profit After Tax (PAT) of INR 197 crore, reversing a loss of INR 738 crore the previous year.

The company also announced the resignation of Judith Jane McKenna as Director, effective 31 January 2024. Donna Morris was appointed Additional Director (Nominee Director) on 24 January 2024 and confirmed as Nominee Director at the Extraordinary General Meeting on 28 March 2024.

Launched in August 2016, PhonePe Group is a leading Indian fintech company, with over 570 million registered users, a network of 40 million merchants, and more than 290 million daily transactions, totalling over USD 1.6 trillion in annualised Total Payment Value (TPV).