{"id":494771,"date":"2025-01-14T17:36:30","date_gmt":"2025-01-14T12:06:30","guid":{"rendered":"https:\/\/inc42.com\/?p=494771"},"modified":"2025-01-14T20:29:02","modified_gmt":"2025-01-14T14:59:02","slug":"can-pops-upicommerce-playbook-dim-cred-paytms-dominance-in-the-upi-verse","status":"publish","type":"post","link":"https:\/\/inc42.com\/startups\/can-pops-upicommerce-playbook-dim-cred-paytms-dominance-in-the-upi-verse\/","title":{"rendered":"Can POP&#8217;s UPI+Commerce Playbook Dim CRED &#038; Paytm&#8217;s Dominance In The UPI-verse?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Driven by the country\u2019s technological prowess, digitisation efforts, a supportive regulatory regime, and the launch of the Unified Payments Interface (UPI) in 2016, India\u2019s digital payment ecosystem has grown unhinged.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Launched by erstwhile RBI governor Raghuram G Rajan, UPI was first piloted in Mumbai with 21 member banks. The tech stack was introduced to address the challenges of traditional banking by creating a seamless platform that could allow fund transfers through mobile devices.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Today, UPI has not only revolutionised traditional payment methods by eliminating the need for extensive details like account numbers or IFSC codes but also made digital payments accessible to all.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Since its launch, the total volume and value of UPI payments have grown manifold. Notably, UPI transactions surged almost 46% to a record 17,220 Cr in 2024 from 11,768 Cr in 2023. Meanwhile, the total value of UPI transactions zoomed over 35% to INR 246.82 Lakh Cr from INR 182.84 Lakh Cr in 2023.\u00a0\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, what has given a big push to UPI adoption in the country is the rise of fintech apps like PhonePe, Google Pay, Paytm, and CRED. Despite more than 77 mobile apps in the UPI ecosystem, only a few rule this space, with Google Pay and PhonePe holding the <a href=\"https:\/\/inc42.com\/buzz\/phonepe-continued-to-dominate-upi-landscape-in-december-2024\/#\">top spots<\/a>.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the whole of 2024, Walmart-owned PhonePe dominated the UPI market with over 48% share, while Google Pay held the second spot with a 37% share. Paytm took the third spot, even though its market share plummeted in 2024 to 7.03% from 14.1% a year ago.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One of the biggest reasons for their dominance is the user &#8220;stickiness&#8221; these apps have created over the years. Now, in this cut-throat segment, a new entrant is aiming to create its own niche.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Founded in 2023 by a former Flipkart employee <\/span><span style=\"font-weight: 400;\">Bhargav Errangi, <\/span><a href=\"https:\/\/popclub.co\/\"><span style=\"font-weight: 400;\">POP<\/span><\/a><span style=\"font-weight: 400;\"> is a Bengaluru-based fintech startup that is obsessed with outdoing Paytm to take the third port in the UPI-verse.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, this is not the interesting part \u2014 what\u2019s intriguing is that it plans to accomplish this with its unique UPI-plus-commerce proposition.\u00a0<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">Within just six months, the founder claims to have captured 0.2% of the market share and is on track to target 10% with its distinctive offering.<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">The startup&#8217;s core features include UPI payments, an integrated marketplace, and a credit card that accelerates the earning of POPcoins.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">POP enhances shopping and payments by combining UPI transactions with its unique rewards programme, POPcoins, just like CRED Coins. However, the founder thinks otherwise. (More on this later.)<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Users earn POPcoins for every UPI payment made, which can be redeemed for products from top direct-to-consumer (D2C) brands across categories like beauty, electronics, fashion, and home goods.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-494869\" src=\"https:\/\/inc42.com\/cdn-cgi\/image\/quality=75\/https:\/\/asset.inc42.com\/2025\/01\/Factsheet-POP-01.png\" alt=\"\" width=\"1080\" height=\"1102\" srcset=\"https:\/\/inc42.com\/cdn-cgi\/image\/quality=75\/https:\/\/asset.inc42.com\/2025\/01\/Factsheet-POP-01.png 1080w, https:\/\/inc42.com\/cdn-cgi\/image\/quality=75\/https:\/\/asset.inc42.com\/2025\/01\/Factsheet-POP-01-294x300.png 294w, https:\/\/inc42.com\/cdn-cgi\/image\/quality=75\/https:\/\/asset.inc42.com\/2025\/01\/Factsheet-POP-01-1024x1045.png 1024w, https:\/\/inc42.com\/cdn-cgi\/image\/quality=75\/https:\/\/asset.inc42.com\/2025\/01\/Factsheet-POP-01-600x612.png 600w, https:\/\/inc42.com\/cdn-cgi\/image\/quality=75\/https:\/\/asset.inc42.com\/2025\/01\/Factsheet-POP-01-150x153.png 150w, https:\/\/inc42.com\/cdn-cgi\/image\/quality=75\/https:\/\/asset.inc42.com\/2025\/01\/Factsheet-POP-01-210x214.png 210w, https:\/\/inc42.com\/cdn-cgi\/image\/quality=75\/https:\/\/asset.inc42.com\/2025\/01\/Factsheet-POP-01-221x225.png 221w, https:\/\/inc42.com\/cdn-cgi\/image\/quality=75\/https:\/\/asset.inc42.com\/2025\/01\/Factsheet-POP-01-74x75.png 74w, https:\/\/inc42.com\/cdn-cgi\/image\/quality=75\/https:\/\/asset.inc42.com\/2025\/01\/Factsheet-POP-01-400x408.png 400w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">POP works with over 600 brands, including Portronics, Bombay Shaving Company, Snitch, The Souled Store, Boat, and Yoga Bars, just to name a few.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">POP has been approved by the National Payments Corporation of India (NPCI) to operate as a third-party application provider (TPAP), enabling UPI payments through its app, POP Club.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The company has <a href=\"https:\/\/inc42.com\/buzz\/ecommerce-enabler-pop-bags-2-4-mn-to-roll-out-upi-offerings-for-d2c-consumers\/\">raised<\/a> more than $5 Mn and counts IndiaQuotient as its key investor.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The startup has partnered with Yes Bank and Juspay to develop its UPI stack.<\/span><\/p>\n<h2><b>The Making Of POP<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">With nearly a decade of experience in ecommerce, Errangi was instrumental in establishing one of India\u2019s earliest social commerce companies, Spoyl. Launched in 2015, Spoyl was a fashion ecommerce platform designed for Gen Z shoppers.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After successfully running Spoyl for over five years, the company was acquired by Flipkart in 2020. Post-acquisition, Errangi joined Flipkart as general manager of Shopsy, where he played a pivotal role in its inception and early growth. Within just four months, he scaled Shopsy to achieve a $1 Bn annualised GMV run rate.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Following his success with Shopsy, Errangi transitioned into a wider role at Flipkart, driving growth across emerging consumer channels.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As a senior director, he developed and implemented the group\u2019s customer growth strategies, focussing on everything from acquisition to retention. His efforts extended to enhancing the Flipkart Plus loyalty programme, growing Supercoins as a leading loyalty currency, and establishing Flipkart\u2019s re-commerce division.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although launching another startup wasn\u2019t initially on his radar, Errangi began to notice how ecommerce was evolving. During his time at Flipkart, he closely observed emerging consumer trends and how the industry was preparing for a shift a decade later.<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">\u201cNew-generation commerce was taking shape, and I wanted to create a lifestyle destination that brought customers together around shared interests \u2014 whether in commerce, entertainment, or offline events. However, building a B2C company in India before 2023-2024 was still expensive,\u201d he explained.<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">According to Errangi, while ecommerce in India had matured with robust demand, logistics, and infrastructure, a significant gap was building a loyal customer network.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Motivated by this, Errangi began conceptualising POP in mid-2022, leaving Flipkart alongside a few colleagues to pursue his vision. By early 2023, POP\u2019s first product, POPcoins, was launched.<\/span><\/p>\n<h2><b>So, How Did UPI Became The Core Of POP\u2019s Proposition?\u00a0<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Soon after the founder started working on his initial idea, he realised that building the customer cross-category network was more of a thesis.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cBuilding a network means reaching millions of customers, and you can&#8217;t just spend money on Meta ads back in 2014 or 2015. So, we thought we should build this network creatively,\u201d the founder said. The question that got him was how to engage customers daily.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">He was sure that ecommerce isn\u2019t a daily activity, but quick commerce is. <\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">\u201c<\/span><span style=\"font-weight: 400;\">To build a strong, scalable customer network with repeat engagement, we needed a daily activity that would drive them to open the app. That&#8217;s when we realised UPI could be that large phenomenon, as it is fast, efficient and secure,\u201d the founder of the fintech startup said.<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">Interestingly, another reason the founder became more confident in entering this space was that while existing apps like PhonePe and CRED were fast and secure, these were either dealing with revenue challenges or customer retention issues.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This gave him the idea to shift to a payments-to-commerce approach, where the entry point to the platform would be UPI.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to the founder, the core customer value proposition of POP is centred around rewarding UPI transactions.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The plan was to create a ring-fenced D2C brand network alongside the marketplace, all tied together with a shopping currency called POPcoins.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When users use the POP UPI instead of other payment apps like CRED, Paytm, or Google Pay, they earn 2% POPcoins on every transaction. These coins can be redeemed at hundreds of partner merchants, offering users the freedom to choose where to redeem them \u2014 unlike the voucher code model used by competitors.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To make this a reality, the startup obtained a UPI licence (TPAP), which took a few months. Following that, the development of tech took over six months, and after being audited by NPCI and RBI, POP became operational.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">POP operates on a unique payments-to-commerce model that integrates payments with a curated D2C network. The platform is built on UPI, offering a high-velocity product that rewards users for every UPI transaction made on the app.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Currently, there are over 600+ brands and 1 Lakh+ SKUs available on the POP app. These brands come from a range of new-age companies, such as Mamaearth, Mcaffeine, Souledstore, and FixMyCurls.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When users make purchases, they can redeem POPcoins for discounts. For example, if a product is priced at INR 500, it can be purchased for INR 400 plus 100 POPcoins, ensuring that the startup offers the lowest market price.<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">POP&#8217;s revenue model is built around three key channels. First is the commerce revenue model, where POP earns a commission (usually around 20%) on products sold through its platform. Second, the platform earns from credit card transactions through the Merchant Discount Rate (MDR).\u00a0<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">For every INR 20,000 spent on POP&#8217;s credit card, the platform generates around INR 150 in revenue. Once a credit card is activated, it creates a consistent, recurring revenue stream for POP. Additionally, POP charges a one-time activation fee of INR 1,000 per card. Another revenue stream is transactional fees from credit card usage, which generate ongoing revenue with every purchase made using the card.\u00a0<\/span><\/p>\n<h2><b>But, Is There A Need For Another CRED?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">While POP&#8217;s business model may seem similar to CRED&#8217;s, the founder emphasises that POP is not trying to replicate CRED or any other existing players. POP is different from CRED in several key ways.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cOne major difference is that POPcoins are closer to real currency, with a fixed value of INR 1. These coins can be redeemed across all selections on the platform and within the network. On the other hand, CRED coins are primarily used for non-commerce engagement, such as playing games or unlocking offers, and they do not have a fixed value.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Furthermore, while CRED operates across multiple sectors like insurance, loans, and payments, with ecommerce being one aspect, POP is solely focussed on the payments-to-commerce conversion. The founder&#8217;s vision for POP is to carve out its own unique niche and capture 10% of the market share.<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">\u201cWhile Google Pay and PhonePe dominate the top spots, there\u2019s still room for new players. Paytm, for example, holds just 10% of the market share, and we\u2019ve already captured 0.2%. Our goal is to grow steadily by introducing more products, features, and engagement tools. By mid-2025, we aim to be among the top 10 players in the UPI space,\u201d the founder said.<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">Further speaking about the differentiation, the founder said that POP differentiate itself by the rewards it offers. Unlike cashback-driven apps, it focusses on creating a stickier reward proposition centred around new-age commerce and the consumption habits of the modern consumer. Besides, it is targeting a young audience.\u00a0<\/span><\/p>\n<h2><b>What\u2019s Next For POP?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">In terms of revenue, while the startup is new, it is currently processing 2.1 Lakh UPI transactions per day. It recorded a total of 6.4 Mn UPI transactions in December 2024. The startup is currently processing close to 10 Mn UPI transactions per month and is already among the top 25 apps in the UPI space. By next month, its goal is to break into the top 20.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The platform is also handling 1,500 ecommerce orders daily, contributing to an annualised GMV of INR 30 Cr on its ecommerce platform. Additionally, it is issuing approximately 4,000 credit cards per month.<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">In the short term, POP aims to reach 100 Mn transactions per month. Additionally, the company is targeting to onboard 1 Lakh active POP credit card users within the next four months.<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">It aims to focus on expanding its brand network and introducing more credit products, including a secured credit card. Along with this, the startup plans to grow its merchant network, both online and offline, with the intention to partner with large enterprise brands like food delivery services and event platforms.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThis expansion will allow customers to redeem POPcoins across a wider range of merchants, making the POPcoin ecosystem more robust and accessible,\u201d the founder said.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While many things might have worked in favour of the founder so far, the biggest challenge that the founder has been facing is convincing consumers to switch from apps like PhonePe and Google Pay to POP and make it their primary UPI app.\u00a0<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">\u201cSince money is involved, building trust is crucial. The startup is overcoming this by offering more value than existing players,\u201d he added.<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">Although still in its early stages, it will be interesting to see how POP competes for a top spot in the UPI market, which is currently led by PhonePe and Google Pay.<\/span><\/p>\n<p><em><strong>[Edited By Shishir Parasher]<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Driven by the country\u2019s technological prowess, digitisation efforts, a supportive regulatory regime, and the launch of the Unified Payments Interface&hellip;<\/p>\n","protected":false},"author":66302,"featured_media":494792,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"title":"Can POP\u2019s UPI+Commerce Playbook Dim CRED & Paytm\u2019s Dominance In The UPI-verse?","image":"https:\/\/inc42.com\/cdn-cgi\/image\/quality=75\/https:\/\/asset.inc42.com\/2025\/01\/ftr-3-1.png","author_url":"https:\/\/inc42.com\/author\/pooja-yadav\/","author_name":"Pooja Yadav","category":"Startup Stories","tags":"","twitter":"Founded in 2023 by Bhargav Errangi, POP is a Bengaluru-based fintech startup that is obsessed with outdoing Paytm to take the third port in the UPI-verse","facebook":"Founded in 2023 by Bhargav Errangi, POP is a Bengaluru-based fintech startup that is obsessed with outdoing Paytm to take the third port in the UPI-verse","linkedin":"Founded in 2023 by Bhargav Errangi, POP is a Bengaluru-based fintech startup that is obsessed with outdoing Paytm to take the third port in the UPI-verse","push_notification":"","newsletter_snippets":""},"categories":[14],"tags":[],"structure_data":{"company_type":"","author_name":"Pooja Yadav","parent_category":"Startup Stories","second_category":null,"development_type":"","post_story_type":"Others","shelf_life":"7 Days","primary_company":"","second_company":null,"primary_industry":"Fintech","series":null,"bucket":"Early Stage","sub_bucket":"Startup Spotlight"},"acf":{"twitter":"Founded in 2023 by Bhargav Errangi, POP is a Bengaluru-based fintech startup that is obsessed with outdoing Paytm to take the third port in the UPI-verse","facebook":"Founded in 2023 by Bhargav Errangi, POP is a Bengaluru-based fintech startup that is obsessed with outdoing Paytm to take the third port in the UPI-verse","linkedin":"Founded in 2023 by Bhargav Errangi, POP is a Bengaluru-based fintech startup that is obsessed with outdoing Paytm to take the third port in the UPI-verse","push_notification":"","newsletter_snippets":"","sentiment__tonality":"Positive","dh_short_body":"","dh_short_cta":"Tap To Learn More","dh_image":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.4 (Yoast SEO v22.5) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Can POP&#039;s UPI+Commerce Playbook Dim CRED &amp; 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