BharatPe Success Story: 5 Impactful Lessons for Every Entrepreneur

Introduction

In India’s rapidly evolving digital payments landscape, BharatPe has emerged as a transformative force, enabling millions of small merchants to embrace cashless transactions. Launched in 2018 by Ashneer Grover and Shashvat Nakrani, BharatPe’s mission was clear: empower offline retailers with a free and interoperable QR payment system. While digital adoption was booming post-demonetization, small shopkeepers were often left behind due to transaction charges and fragmented payment systems. BharatPe bridge that gap by offering a zero-MDR (Merchant Discount Rate) platform, allowing merchants to accept payments from all UPI apps without incurring fees.

From disrupting QR payments to launching merchant-focused Buy Now Pay Later (BNPL) services and entering the fintech lending ecosystem, BharatPe’s journey has been anything but conventional. By August 2021, the startup had raised $370 million in a Series E funding round led by Tiger Global Management, bringing its total equity funding to over $580 million and achieving a valuation of $2.85 billion . As of August 2022, BharatPe reported reaching an all-time high of $20 billion in annualized total payments value (TPV), up from $18.5 billion in June 2022.

“We wanted to make the kirana store owner a first-class citizen in the digital economy.”
— Ashneer Grover, Co-founder, BharatPe

BharatPe’s rapid expansion has seen it establish a presence in over 400 cities across India, significantly enhancing financial inclusion for small and medium-sized enterprises (SMEs) . By focusing on underserved markets and leveraging technology to simplify digital transactions, BharatPe has solidified its position as a key player in India’s fintech sector.

Origin Story

The inception of BharatPe is rooted in a shared vision between two founders from very different backgrounds, united by a common goal — to democratize digital payments for India’s vast and underserved merchant community. In 2017, Shashvat Nakrani, then a 3rd-year student at IIT Delhi, observed firsthand how small business owners in local markets were discouraged from accepting digital payments. The culprit? High MDRs (Merchant Discount Rates) charged by banks and wallet companies, making UPI transactions unviable for already thin-margin businesses.

Simultaneously, Ashneer Grover, a seasoned financial professional with leadership stints at Kotak Mahindra Bank, Grofers, and American Express, had been closely watching the fintech boom. He recognized that while companies were focusing on digital consumers, no one was building for the merchant — the backbone of India’s economy. The two connected, and the idea of BharatPe was born: a zero-MDR, merchant-first platform that would offer a single interoperable QR code to accept payments from all major UPI apps — including PhonePe, Google Pay, Paytm, and others — without charging fees.

“We weren’t just building a product. We were solving a pain point for 50 million small merchants.”— Shashvat Nakrani, Co-founder, BharatPe

The founders’ idea was simple yet revolutionary: make digital payments free, seamless, and universal for merchants. BharatPe’s unified QR code was a first-of-its-kind innovation in India. In late 2018, the team launched its first pilot in Delhi’s Lajpat Nagar and Chandni Chowk markets. The response was phenomenal — merchants were not only willing but enthusiastic about adopting BharatPe, as it reduced their dependence on cash and eliminated transaction charges.

Encouraged by the early success, BharatPe rolled out its product across Tier 1, 2, and 3 cities, tailoring its model for street vendors, kirana shop owners, and service-based businesses. The BharatPe QR code soon became a common fixture across over 7 million retail points in India, from corner chai stalls to garment shops — setting the stage for BharatPe’s hyper-growth journey.

The company’s strong field execution and merchant-first thinking created a deep moat early on. It wasn’t just a tech product; it was a solution built with empathy for the Indian retailer.

Business Landscape and Challenges

When BharatPe entered India’s booming fintech space in 2018, the market was already saturated with major players like Paytm, PhonePe, and Google Pay. These platforms had captured a significant chunk of the digital payment user base, primarily focusing on the consumer side.

BharatPe, however, chose a completely different path by focusing on merchants—particularly small shopkeepers and kirana store owners—who were often excluded from the digital revolution. This merchant-first model allowed BharatPe to carve a unique identity in a crowded market, but not without facing substantial hurdles.

One of the major challenges was the low level of digital literacy among its target users. Many small business owners had never used UPI systems or digital payment apps, let alone understood how QR codes worked. Training and onboarding these merchants required significant handholding, often necessitating physical visits and real-time demonstrations.

Another issue was high customer churn. Since BharatPe did not charge any transaction fees and UPI systems were inherently interoperable, merchants could easily switch to other providers with no financial penalty, creating difficulty in building lasting loyalty.

Moreover, introducing lending products to this segment came with its own set of complications. While BharatPe pioneered merchant-focused credit offerings like Buy Now Pay Later (BNPL) and working capital loans, many shopkeepers were hesitant or skeptical. Years of dealing with cumbersome bank loans or aggressive recovery tactics from unorganized lenders had left them distrustful of financial institutions. BharatPe had to win their confidence, not just through marketing, but through transparency, speed, and empathy.

Regulatory uncertainty added another layer of complexity. As digital payments grew exponentially in India, frameworks around digital lending, data privacy, and KYC compliance were still evolving. BharatPe had to stay agile and constantly adapt to changing RBI and NPCI guidelines to remain compliant while scaling fast.

What truly differentiated BharatPe was its grassroots-level approach. Instead of sitting in air-conditioned offices and designing strategies remotely, the founding team and on-ground salesforce actively engaged with merchants across cities and small towns. They listened to problems, offered on-the-spot solutions, and ensured the experience was personal. 

“We didn’t sit in offices. We were out there with the shopkeepers, understanding their world.” – Ashneer Grover

This human-first, merchant-centric approach helped BharatPe overcome barriers, build trust, and scale where others had failed.

Growth Strategies

BharatPe’s rapid growth wasn’t accidental — it was the outcome of a focused and deliberate playbook. The company prioritized one audience above all: merchants. Every product, from QR codes to cashback systems, was designed to make life easier for small shopkeepers. The platform seamlessly fit into their daily routines, requiring no drastic changes, which led to high adoption rates.

A key to their scale was offline distribution. Instead of depending solely on digital ads, BharatPe invested heavily in an on-ground sales force. Field agents personally visited stores across 400+ cities, onboarding over 7 million merchants by 2021. This human touch built trust and familiarity in markets where digital skepticism was high.

Another powerful strategy was embedded lending. By analyzing transaction data collected through QR usage, BharatPe introduced collateral-free, short-term loans tailored to merchants’ financial behavior. These loans filled a crucial credit gap for small businesses that had long been overlooked by banks.

BharatPe also expanded through strategic acquisitions. It acquired Payback India to enter the loyalty space and invested in Unity Small Finance Bank to establish a deeper presence in credit and savings. These moves reflected its ambition to build an end-to-end digital financial ecosystem for merchants.

As Ashneer Grover summed it up, “We weren’t here to just survive. We wanted to build India’s largest digital bank for merchants.” This bold vision pushed the company to keep innovating beyond payments.

Marketing Strategy

BharatPe took a radically different approach to marketing. While competitors splurged on celebrity ads and television spots, BharatPe relied on merchant happiness and street-level visibility.

Its first major marketing engine was word-of-mouth. Merchants loved the zero MDR benefit and cashbacks, and quickly began referring others. This organic spread, especially in closely-knit retail communities, gave BharatPe powerful network effects without large ad spends.

To reach smaller towns and vernacular audiences, BharatPe partnered with regional fintech influencers. These content creators explained BharatPe’s products in local languages, helping simplify digital finance for millions of small business owners.

On the branding front, BharatPe made its presence felt in every retail market. The company placed QR stickers, posters, and standees in shops, tea stalls, and service centers. These visuals created strong brand recall — BharatPe became synonymous with merchant payments.

Beyond visuals, BharatPe positioned itself as an educator and community builder. It organized webinars and credit awareness drives for merchants. These efforts helped merchants gain not just tools but also confidence in using financial services.

As Shashvat Nakrani put it, “We didn’t advertise. We evangelized.” BharatPe’s marketing wasn’t just about promotion — it was about empowering and building relationships with India’s merchant base.

5 Impactful Lessons Every Entrepreneur Should Learn from BharatPe

1. Solve Problems for Overlooked Segments

BharatPe’s success can be traced back to its focus on a largely neglected demographic: small merchants. While competitors were focused on consumer apps and digital wallets, BharatPe turned its attention to the underdog — small businesses that were struggling with high transaction fees and fragmented payment systems.

By addressing the unique needs of these merchants, BharatPe was able to build a loyal user base and gain market traction. Entrepreneurs should look for gaps in the market where underserved populations have unmet needs. These overlooked segments can be fertile ground for innovation and growth.

2. Simplify Relentlessly

BharatPe understood that complexity kills adoption. Their unified QR code, which accepted payments from multiple UPI apps without imposing transaction fees, was a game-changer for small merchants.

By eliminating friction and offering a product that was easy to use, BharatPe achieved fast adoption rates and became a trusted name among shopkeepers. Entrepreneurs should always strive to simplify their products, ensuring that users can understand, adopt, and benefit from them with minimal effort.

3. Hustle at the Ground Level

For BharatPe, success was not built in the boardroom or through digital campaigns — it was forged in the streets of India. Founders Ashneer Grover and Shashvat Nakrani spent significant time engaging with merchants in person, understanding their pain points, and ensuring that BharatPe’s product met their needs.

This hands-on approach gave the company credibility and built trust among its users, especially in tier 2 and tier 3 cities. Entrepreneurs should never underestimate the power of ground-level engagement to understand their customers’ real challenges.

4. Monetize via Value, Not Fees

BharatPe disrupted the traditional fintech model by offering free QR payments and focusing on monetizing through additional financial products, such as lending, rather than charging merchants a fee for transactions.

This innovative approach not only built trust with merchants but also created new revenue streams for the company. Entrepreneurs should focus on offering value to their customers, with the belief that additional revenue opportunities will emerge naturally as the business grows.

5. Evolve with Your Audience

BharatPe began with a simple QR code for digital payments but quickly evolved its offerings to include lending, BNPL services, and even banking solutions.

The company’s ability to evolve based on customer needs and market demand allowed it to stay relevant and continue growing. Entrepreneurs must remain adaptable, listening to their customers and iterating their product or service based on emerging needs and trends.

“We always asked — what’s the next big pain we can solve for our merchant?”
— Ashneer Grover, Co-founder, BharatPe

Conclusion: Key Takeaways from BharatPe’s Journey

BharatPe’s journey is a testament to the power of customer-centric innovation. It shows that true innovation isn’t solely about cutting-edge technology but rather about making an impact by addressing real-world problems in ways that resonate with users. By focusing on simplifying digital payments for small merchants, BharatPe removed barriers that had long been a challenge in India’s fragmented payments ecosystem. Its success lies not just in offering a zero-MDR payment system but in understanding the nuances of small business owners’ struggles and offering solutions that were intuitive, reliable, and easy to adopt.

The company’s evolution from just a payment platform to offering lending products, BNPL services, and even branching into banking further highlights its commitment to continuously adapt and serve its core audience. BharatPe’s approach — simplifying complex financial services and focusing on creating genuine value for its users — sets a powerful example for entrepreneurs.

For any entrepreneur, the key takeaway from BharatPe’s journey is clear:

• Solve a real problem: Identify pain points that matter to your target audience and focus on solving them.

   

• Do it simply: Avoid overcomplicating your product. Keep it user-friendly and accessible, especially for those who may not be tech-savvy.

   

• Scale it boldly: Once you have a proven model, take it to the next level. Expand your reach and impact with confidence.

   

• Never lose touch with your users: Keep a close relationship with your customers. Understand their needs, be empathetic, and ensure you are always offering value.

   

BharatPe has redefined the way digital payments work for small businesses in India and paved the way for a new era in fintech. Entrepreneurs can draw immense inspiration from its journey, where success is grounded in relevance, simplicity, and a genuine commitment to serving its users.