If you thought that launching its own mobile wallet Flipkart Money was the sole aim of Flipkart in digital payments segment, think again. Because the e-commerce major has acquired another mobile payments company called PhonePe. And it is the third major acquisition for India’s largest ECommerce player by GMV in the digital payments space, first two being the acquisitions of NGPay and a majority stake in FX Mart.
PhonePe was founded by the former employees of Flipkart itself. The Bengaluru-based startup, which was launched in December has not come up with a product yet but it is said to be working on a new payments technology based on Unified Payments Interface (UPI), which is an initiative of the National Payments Corporation of India.
UPI is expected to go live from this month and according to many experts, it has potential to completely transform the digital payments scenario in the country.
Sameer Nigam, Co-founder, PhonePe adds,
PhonePe’s mission is to significantly improve the online and offline digital payments experience for millions of Indian customers. We are really excited to merge with Flipkart and get access to one of the largest consumer bases in the country, which will allow us to realize our vision at a much larger scale.
This is because the system allows the users to make transactions using just their Unique Identification Number( Adhaar), mobile phone or a virtual payment address. It also enables instant fund transfers between banks with the help of a single identifier.
This explains the interest of Flipkart into PhonePe as despite its two major acquisitions of digital payment startups, Flipkart has so far remained unsuccessful to offer a stronger, more robust alternative against the likes of Paytm and the Snapdeal-owned Freecharge. Freecharge meanwhile had recently launched its own wallet service and had already reached 1 Million transactions in February, making things even more tougher for Flipkart.
PayZippy — Flipkart’s answer to the digital payment leaders — was launched with much hope but it was shut down within a year of launch as it failed to get any significant customers and also failed to get a license.
The first acquisition of NGPay has not resulted in any new product or technology as well whereas FX Mart helped in the recent launch of Flipkart Money as it has its own license of prepaid wallet. And it is too soon to say anything about its performance.
In a release sent to us, Flipkart says that the PhonePe team will transition to Flipkart but will function as an independent business unit.