Ola, PhonePe ally for easy digital pay ride

Digital payments company PhonePe has joined hands with ridehailing firm Ola to allow consumers to book cabs and autos from the PhonePe app and initiate payments without the second factor of authentication through the connected debit or credit card.

Utilising the Reserve Bank of India window allowing card transactions of less than Rs 2,000 to pass on without the second factor of authentication, PhonePe will be taking standing instructions from the consumer on their preferred card for this facility — once the ride is completed, the payment will happen seamlessly.

“As of now, this will be opened up for HDFC Bank and ICICI Bank card users. In the next two months, we hope to onboard the other major banks as well for this feature,” PhonePe cofounder Rahul Chari said.


This strategy fits into its overall design to develop the app-in-app model where PhonePe is partnering with multiple players to allow customers access major use cases for their payment applications. The startup already has bus ticketing service redBus on its platform. According to it, 10% of the consumer-driven redBus bookings are now happening through PhonePe. “Just like Paytm has been building all the products themselves, we want to build all the products through partnerships which will help us scale up faster and at the same time build consumer loyalty,” said Chari.

Once UPI 2.0 goes live, PhonePe will be able to initiate collect request from the user through that payment system as well. Chari said the vision around PhonePe was to build the platform in a way so that third-party merchant applications can be constructed on the top, thereby creating a winning proposition for all players.

In a previous interaction with ET, PhonePe founder Sameer Nigam had said the company was aiming to have around 30 such applications within its ecosystem. It has already on-boarded Airtel Money, Jio Money and Freecharge.

While on one hand these are attempts by payment companies to capture market from Paytm, which has already become a payments and ecommerce behemoth, it is also opening up a game between Uber and Ola. While Uber has partnership with Paytm and shown perhaps the biggest use case for mobile wallets, Ola has tied up with both Mobikwik and PhonePe.

While Phone-Pe’s standing instruction feature is unique in the market, other payment companies are also vying for a share of the passenger volume of the domestic cab-hailing company, which will boost usage.