Urgent Warning: GenAI’s Impact Sparks Caution from PhonePe CTO Rahul Chari | Must-Read Tech Insight

Rahul Chari, Co-Founder and CTO of PhonePe, discussed the company’s profitable turnaround with an adjusted profit of Rs 197 crore in FY24 after a Rs 738 crore loss in FY23. Despite this progress, regulatory challenges persist, particularly the 30% market cap on UPI payments, which is delaying PhonePe’s IPO. Chari argues that caps discourage innovation and investment in a competitive ecosystem. He suggests that stricter regulations based on scale could address systemic risks more effectively.

Chari also touched on the ongoing debate over the merchant discount rate (MDR), advocating for sustainable payment systems that include MDR to ensure positive unit economics. PhonePe integrates machine learning extensively to manage its massive transaction volumes, enhancing risk management while exploring AI applications cautiously.

On the tech front, PhonePe prioritizes scale, reliability, and security, operating its payment system on-prem to optimize performance and capacity. The company is committed to open-source solutions, contributing back to the community by sharing their in-house developed platforms publicly on GitHub.

As fraud and cyber threats grow in the UPI ecosystem, PhonePe invests in robust fraud detection systems like Guardian, which may soon be available to other players in the industry. These efforts aim to protect users, especially as new entrants increasingly adopt digital payments. Chari emphasized the importance of open-source software and local innovation to build cost-effective and scalable systems, reflecting a commitment to both security and community engagement.

Original Story https://www.business-standard.com/companies/news/we-should-be-cautious-about-how-genai-is-used-phonepe-cto-rahul-124101300385_1.html
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