PhonePe scales AI across payments and operations

PhonePe is expanding the application of artificial intelligence across various aspects of its business, from customer service and fraud prevention to merchant tools and corporate operations. The company's founder and chief product and technology officer, Rahul Chari, emphasized that their focus is on deploying AI to generate tangible improvements in operational, product, or revenue metrics rather than a haphazard integration of the technology throughout their platform.

Chari stressed that not every customer experience will inherently benefit from AI, and instead, the company identifies operational inefficiencies where artificial intelligence can lead to a significant shift in performance. This strategic approach is informing investments in customer interactions, back-office workflows, and engineering, while still utilizing traditional systems where automation offers little additional value.

Today, automation handles approximately 94 percent of customer support cases, an increase from around 90 percent, and PhonePe aims to reach 96 percent. In fraud investigation, automation has advanced to a point where about 80 percent of investigations can be managed by automated systems, allowing specialized teams to concentrate on complex incidents and emerging fraud patterns.

The company is also leveraging AI to enhance consumer-facing services, such as natural-language search that enables users to navigate the app and perform tasks through voice or text commands. PhonePe is exploring more conversational capabilities for personal finance, insurance, and investment products, with its current search system capable of interpreting user requests like making a payment, recharging a FASTag, or locating transaction information.

Moreover, the fintech firm has introduced an AI-powered integration layer for merchant products, designed to facilitate the connection between online businesses and PhonePe's payment gateway through conversational instructions, thereby simplifying the process that would otherwise require extensive technical knowledge. In June, PhonePe also launched SmartPages, an AI-powered feature that auto-generates payment pages based on merchants' descriptions of their offerings, allowing for product copy selection, relevant customer data fields, and a mobile-friendly layout.

Looking ahead, PhonePe is contemplating additional agentic functions for its business app, such as responding to merchant and customer inquiries and assisting businesses in creating and distributing offers or coupons. The company is also exploring ways to integrate commerce activity with services like WhatsApp and Instagram.

AI is integrated into PhonePe's software development process, encompassing every stage from solution design and coding to code reviews, testing, deployment, troubleshooting, and debugging. Internal tools include TraceMine for crash analysis, Lens for initial root-cause analysis using logs, and KadAI for code orchestration and agent-based development.

Corporate functions are also being brought into this framework through an internal Agent Hub, enabling non-technology teams to automate workflows. This platform is built to comply with regulatory requirements in the financial-services industry, with controls focused on data access, leakage, and localisation.

One of PhonePe's objectives is to expedite its new-product introduction process, which currently takes about 30 days and involves reviews by compliance, privacy, legal, trust, and safety teams. The company is investigating the potential of AI-enabled workflows to reduce this period to under a day. The article 'PhonePe scales AI across payments and operations' was originally published on Arabian Post.