Flipkart has made fresh investments of $38.7 million (around Rs 250 crore) in its digital payments unit PhonePe to scale its marketing efforts to reach more merchants and customers at a time when competition in the space has heated up with the entry of global technology giant Google.
PhonePe claims it is the largest unified payments interface (UPI) app for merchants in the country with over 25,000 offline merchants accepting payments through its platform. Nearly half of all UPI transactions in August were through the app, claimed the company, even as it looks to expand its user base and merchant network.
UPI, built by the National Payments Corporation of India (NPCI), allows individuals or merchants to pay or receive money for even small transactions from their bank accounts using their smartphones.
Google’s UPI app Tez, tailored more towards peer-to-peer (P2P) payments, is also looking to expand and grow in the merchant payment space. The global internet major has decided to experiment with a local payment platform, offering payments services to Indian consumers for the first time and is looking to gain from first-time users of the internet on their smartphones.
“This capital infusion will be used to grow our business, build our team and scale our marketing efforts. We are growing exponentially at nearly 100 per cent every two months. Around 45 per cent of all UPI transactions in August were driven by us, resulting in a phenomenal 66 per cent growth in the volume of transactions over July,” said Sameer Nigam, Co-founder and CEO, PhonePe.
The fund infusion into PhonePe comes months after Flipkart raised $4 billion in two separate rounds from investors, including SoftBank, Tencent and eBay. Chinese Internet giant Tencent is among the largest players in the global digital payments space along with WeChat, which is the largest instant messaging app ecosystem in China.
Since April, there have been over 127.93 million UPI transactions, according to the latest NPCI data as commercial and payment banks such as Paytm continue to integrate their respective platforms on their mobile apps for the benefit of customers.
India is among the first countries in the world to successfully roll out a common shared platform for digital payments that doesn’t lock users to any single company or a bank.