Phonepe Banks On Trust

WALMART-BACKED DIGITAL PAYMENTS PLATFORM PHONEPE AIMS TO TURN PROFITABLE SOON BY LEVERAGING ITS NETWORK OF RETAIL CUSTOMERS AND MERCHANTS TO OFFER A RANGE OF PRODUCTS AND SERVICES.

- Aveek Datta

THE PIVOT TOWARDS CREATING A DIGITAL economy in India started circa 2014 with the likes of Paytm and MobiKwik launching digital wallets, where customers could store money and make payments for a host of utilities. These services gained rapid traction after the government banned high-value currency notes in November 2016. But they lost steam after the Unified Payments Interface (UPI) made it possible to directly transfer funds from one bank account to another at the tap of a smartphone screen.

Meanwhile, as mobile wallets reigned supreme, one company appeared to tread a different path since its inception in 2015 by shying away from wallets and focussing solely on UPI based payments. Cut to 2019. PhonePe’s strategy appears to be paying off. The Bengaluru-based company, founded by three former Flipkart employees, is among the top three UPI-based payments companies in India, along with Google Pay and Paytm; in peer-to-merchant (P2M) payments, it is the largest. And from the looks of it, the company is just getting started.

PhonePe was acquired by Flipkart in 2016, and is now a part of Walmart after the Bentonville-based retailer acquired Flipkart in 2018. It has an annual total payments volume (TPV) run rate of $70 billion and 50 million monthly active users make peer-to-peer (P2P) and P2M payments on the platform, which also serves as a super app for all kinds of services ranging from Ola cabs to train tickets via IRCTC. In an interview, Sameer Nigam, 41, co-founder and CEO of PhonePe, tells Fortune India how the company plans to leverage its user base to sell other products and services and how the affiliation with India’s largest online marketplace and the world’s largest retailer helps its cause. Edited excerpts: