Introducing relevant scratch cards to PhonePe 💰

I along with my team was asked to find a way to improve the engagement of the PhonePe platform and an important fact/information was shared with us that The users who perform 3 transactions on the PhonePe in different categories, tend to become repeat customers of Phone for sure. This was quite an intriguing and challenging problem for all of us, So we brainstormed a lot and came up with a pool of ideas like relevant scratch cards, relevant offers, educating users on financial literacy, relevant notifications, etc. And we all agreed that implementing relevant scratch cards had the most potential in terms of increasing the engagement of the platform and the solution that we will be building was finalized. In the remaining article, you will read more in-depth about how we went about understanding the company, the user needs, defining the problem and the solution space, defining the strategy for execution, and much more. 🚀

TAM SAM and SOM calculations:

Porter’s Five Laws:

The threat of New Entrants — High

• Dominant players can retaliate strongly on any new entrant
• High economies of scale
• Low switching costs
• Low customer loyalty for non-established brands makes the entry of new companies easy

Bargaining power of buyers — High

• The large size of the user base
• Buyers can easily compare alternatives with the help of information on the internet
• Low switching cost for customers as they can easily switch between Paytm and GooglePay through one click on their mobile phone
• High price sensitivity leads companies Paytm and GooglePay to offer promotions very frequently to entice customers

The intensity of Competition — High

• Several large players exist within the digital payments space and switching cost among them is very low
• Low brand loyalty among customers
• It is difficult to increase market share in light of the existence of renowned players googlepay and paytm and startups in select geographies

Bargaining power of suppliers — High

• Suppliers are not very large in number so their bargaining power is high
• They have the power to negotiate
• Suppliers can only have cash payments or encourage card payments

Threat of Substitutes — High

• Price sensitivity is very high among customers
• Customers often switch between similar payments apps based on promotions
• Low degree of differentiation in payment business as most companies offer the same service

Threat of Entry — High

• Less capital required for market entry
• Ease of setup
• Strong retaliation from dominant players
• Low switching cost
• High economies of scale
• Low customer loyalty
• High amount of consolidation

Bargaining Power of Buyers — High

• Large size of user base
• Buyers can easily evaluate alternatives
• Low switching costs
• High price sensitivity

Competitive Rivalry

• Existence of multiple small and large players
• Low brand loyalty among customers
• Difficult to increase market share with large players existing

Threat of Substitutes — High

• High price sensitivity
• Low switching costs
• Low degree of differentiation

Bargaining Power of Suppliers — High

• Not very large in number so their bargaining power is high
• Power to negotiate
• Can easily forward integrate by setting up with other payment systems

Understanding the Users

To understand, user behaviors and preferences, and following are the key objectives

• To analyze the trend of respondents towards Phonepe
• To examine the factors influencing the respondents to other UPI platforms over PhonePe
• To promote new technologies and increase the usage of Indian payment services
• To provide suitable recommendations and suggestion, if any.

Hypotheses:

• Most of the people in India still doesn’t use the digital payment
• Mostly people don’t understand all the features in the app
• User adoption will be more if they have more offers and discounts
• Improving the customer services will improve the more transaction and payment

Findings and Conclusion

• 10% of them still do not use digital banking services so they should be pitched to uses online banking.
• To improve its prominence of phonepe over Paytm, phonepe should increase its promotional techniques so that everyone around have enough knowledge about the app and start using it
• As per the responses we can figure out that few people have security related queries and so they are stepping back
• Improve the offers and discounts which they give so that the customers will to make more transactions using phonepe and do not think of other applications.
• The applications customer service department should improve their quality of service as that is the main reason for preferring phonepe over Paytm.

Wireframes:

User when completes an transaction he receives an scratch card and it is stored in the rewards tab

User after pressing the rewards button can see all the available scratch cards with him and can select one and scratch

After scratching the card the rewards which we offer will be in line with the product offerings in our application

1. If you recharge in the next 1 hour you will get 40 rs of
2. If you order food through zomato you will get 100 rs off

Prototype link — Link

Tools used for prototype — Marvel

Tool used for wireframes — Whimsical

Implicit Feedback:

Just like any other AI/ML model, our recommendation or customisation engine improves with increase in training data. Implicit or explicit feedback collected from users will be fed to the model to improve prediction accuracy. Using feedback, model will get a chance to go through various cases for which it already knows the output. This will avoid stagnation of prediction accuracy and improve the model.

Following information should be collected from the implicit feedback:

1. Efficiency of recommendation engine suggesting offers
2. Efficiency of model customising the scratch cards and coupons
3. Efficiency of model customising the notifications

Following metrics can be used in collecting the feedback implicitly:

1. Number of offers used per customer:

This will provide the implicit feedback from user about the recommendation engine that is suggesting the offers to customers.

2. Number of scratch cards or coupons redeemed:

This will provide information about the relevance of scratch cards provided to the user. Higher percentage of redemption implies higher efficiency of model customising those coupons for customers.

3. Number of app launches through notifications:

This will provide information about the effectiveness of customised notifications. Increase in number of app launches through notifications implies efficiency of AI/ML model used.

Product Roadmap:

Notifications before expiry of scratch cards

Key MVP Features :

• Relevant scratch cards
• Redesign the rewards page
• Ability to exchange scratch cards