PhonePe bets big on UPI-based payment

Digital payments app PhonePe, owned by e-commerce major Flipkart, aims to be the largest payment player in the country this year.

PhonePe, which launched its app based on the Unified Payment Interface (UPI) platform about two months ago, is betting big on the government’s initiative to create a cashless economy by promoting different means of digital payment mechanisms.

Sameer Nigam, founder and CEO, PhonePe, told BusinessLine that UPI-led payment mechanisms will make all other wallets redundant going forward, as it allows users to instantly transfer money from their account.

Also, unlike other wallets, it doesn’t charge for transfering money from the wallet to the bank account.

PhonePe charges a processing fee of 50 paise from the banks. He said, unlike e-wallets, which need to be refilled with money to make a transaction, UPI-enabled apps do away with this step by directly connecting payments to the bank accounts of a user, making it more convenient.

“The beauty of the app is that one doesn’t need to store any money in the wallet for making a seamless transaction.

“Plus, we are also working on features that would allow an user to send money to a mobilephone number — this will be a game changer,” Nigam said.

He added that next in the pipeline is a feature with recurring and standing instructions to the user reminding them to pay their bills, fees and other payments.

Nigam said that 2016 was all about reinventing the app, which is available for Andriod users at present and would be made available for iPhone users in a couple of weeks.

In 2017, the company plans to focus on localisation of the app on the basis of languages.

It has so far added nine languages, and would be adding more in the coming months to tap into smaller towns and cities.

The company is also planning to fully integrate the app on merchant sites.

It has already added the feature to Flipkart, and will be soon roping in another 30-40 large online merchants.

“You don’t hold your entire household expenses in the wallet, but take out an amount as and when required from the bank. UPI will solve a lot of problems around this,” Nigam said, adding that the company is working on the merchant side to make reverse payments and refunds faster.

PhonePe, which is also a strategic partner with YES Bank for its UPI app, was bought by Flipkart in late 2011.

It’s not yet clear how digital-wallet providers plan to combat the threat from UPI-based payment start-ups. But, the likes of Paytm, FreeCharge (owned by Snapdeal) and MobiKwik have a huge head start over their UPI-based rivals.

Paytm has secured a payments bank licence, and is expected to integrate its wallet solution with its banking efforts.

“Choosing among payments solutions will come down to ease of use of the product. Our goal is to remove the need of going to your bank’s site or app,” Nigam said,

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