PhonePe eyes offline merchant base of 7 million by year-end

Flipkart-owned payments platform PhonePe has grown its offline merchant base to over one million from 60,000 last June.

The Bengaluru-headquartered company is targeting 6-7 million offline merchants by December 2019, and also plans to launch its wealth management services in the first half of calendar 2019, a top executive from the company told BusinessLine.

“Till June 2018, our offline merchant base was just 60,000. This is because, Indian merchants want instant settlement of payments and still prefer cash over digital payments. Ever since we started onboarding offline merchants in a P2P (peer-to-peer) payments mode — which allows the transfer of payment from a consumer’s bank account straight to the merchant’s bank account through our app — the game has completely changed, and we now have over one million merchants. We are aiming to have 6-7 million merchants by the year end,” said Sameer Nigam, CEO, PhonePe.

To achieve this target, the company will increase its ‘feet on the street’ headcount to 8,000 people from the 4,000-plus at present. PhonePe is also being used across 50,000 stores of the top 100 national retail chains, which form a part of the organised retail sector.

Multiple UPI merchants

“PhonePe’s QR solution allows merchants to accept consumer payments from any UPI app, and not just PhonePe, ensuring they don’t face the hassle of dealing with multiple partners. We are also helping these merchants by providing them visibility on our app, allowing our 150 million users to discover all the retailers and merchants in their vicinity that accept PhonePe, thereby increasing footfalls to their business,” said Vivek Lohcheb, Head, Unorganised Business, PhonePe.

Flipkart had committed to a $500-million investment in PhonePe in October 2017, of which the company has already received $250 million in two tranches last year.

Asked if the remaining $250 million was enough for the company to reach its target, Nigam said: “We will need more than $250 million this year. And we now have both Flipkart and Walmart to turn to for more capital.”

Nigam said the company plans to introduce mutual funds and insurance products as a part of its wealth management services on the PhonePe app in the first half of the year.

In December, the number of transactions on PhonePe crossed 185 million. Using PhonePe, users can send and receive money, recharge mobile, DTH, datacards and make utility payments.