Flipkart has acquired PhonePe, a Banguluru-based mobile payments company, a company co-founded by former Flipkart employees Sameer Nigam and Rahul Chari, for an undisclosed sum.
The company is reportedly building a product based on the new unified payments interface (UPI) of the National Payments Corporation of India (NPCI).
“Payments have been one of the biggest hurdles for mass adoption of online shopping in India. UPI has the potential of transforming the entire payments ecosystem in the country. The acquisition of PhonePe is in-line with Flipkart’s focus on driving innovation on the payments front,” Binny Bansal, CEO, Flipkart, said.
UPI, planned to go live in the April, will allow users to transact using their unique identification and mobile phone number or virtual payments address without sharing any other bank details.
In contrast to the present payments process, which involves entering numerous account and card details and multi-level interventions, UPI will provide a highly secure hassle-free digital payments experience.
Anyone holding an active bank account can easily perform instant transactions by simply using their mobile phone.
The PhonePe team will transition to Flipkart but will function as an independent business unit.
“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,” said Sameer Nigam, Co-founder of PhonePe.
PhonePe is Flipkart’s third major acquisition in payments. The current leaders in payments are Paytm and Freecharge followed by smaller firms such as Oxigen Services and One MobiKwik Systems.
A recent report that surfaced online states that ecommerce giant Flipkart was considering selling itself to Amazon. However, a Flipkart spokesperson reached out to tech2 and stated, “The report is pure fiction and seems to have been constructed based on invisible sources that have highly imaginative minds and given to improbable flights of fancy. There have been no talks or discussions for potential sale. Flipkart continues to be the market leader in India and we are in this business for the long haul.”
Flipkart is India’s largest e-commerce marketplace with over 60 per cent market share of mobile commerce. With a registered customer base of 75 million, Flipkart offers more than 30 million products across 70+ categories including Smart Phones, Books, Media, Consumer Electronics, Furniture, Fashion and Lifestyle.