Why BharatPe offered payments free of charge?

Ashneer Grover and Shashvat Nakrani, co-founders of BharatPe, had a fair amount of struggle—in the beginning—to convince the merchants to become part of BharatPe's payment system. They were suspicious initially, It was about generating trust and convincing merchants to put our QR code, says Grover. "We were just a small player in the segment amidst established ones. Merchants had the initial disbelief that it was too good to be true," he adds. They explained to the merchants that they would offer payments free and give loans on top of it. Another struggle was to get the right engineers to build the backend that can handle millions of transactions.

The major breakthrough idea in their business was making payments free of charges. "It was a tough call since banks were charging us for transactions, but we were not charging merchants. We had the conviction that bank charges for merchants were not sustainable for a long time since people to people transactions were free," adds Grover. This strategy helped them in building a merchant base of 75 lakh. BharatPe powers ₹6,000-crore worth of transactions a month on UPI and, additionally, there are 1,00,000 card machines, which generate transactions worth ₹1,500 crore.