Digital wallet PhonePe, a Flipkart product, is likely to get a major leg-up to not only fight its rivals in the overcrowded Indian mobile payments space, but also get an entry into the US. Retail giant Walmart, which acquired Bengaluru-based Flipkart for a whopping $16 billion, told analysts in a conference call yesterday that it wants to use Flipkart’s payment capabilities in the US market soon.

Judith McKenna, Walmart’s COO, while praising about innovation carried out by Flipkart on areas such as logistics and payment system and their “problem-solving culture” said that, “Flipkart has done major innovation in the AI space and the way the company has been using data across their platforms, particularly in terms of the payment platform PhonePe”.

“All of those things we can learn from for the future and see how we can leverage those around the international markets and potentially into the US as well,” McKenna said.

While there are players like PayPal, Apple, Samsung fighting it out for the dominant position along with self-branded mobile payment apps including those from retailers like Walmart and Target, China’s Alipay is also slowly entering the market.

Experts, however, feel that it would be a daunting task for Walmart to take on rivals with the help of PhonePe in a market that is fast evolving to newer technologies such as voice-based payments. Thanks to Google Home and Amazon’s Alexa.

But Walmart can have a vantage point in India. They feel that Walmart will also use PhonePe to sell its own products, besides empowering millions of kirana (neigbourhood) stores in the country that can work as a front-end for the retail company.

Sanchit Gogia, Founder, Greyhound Research, said: “We expect Walmart to modernise at least 10 million kirana stores over the next three-five years by way of enabling digital transactions and modernising retail practices at large. More specifically, we expect a more significant push for UPI-based transactions through PhonePe.”

PhonePe has launched a Point of Sale (PoS) device powered by Bluetooth technology for its offline merchants in areas with patchy Internet or no connectivity. This has helped the company grow its merchant base significantly in the last two years. At present, it has over 60,000 online and offline merchants across segments such food delivery, groceries, travel portals etc It also has consumers using PhonePe to make P2P money transfer, make financial investments among others.

PhonePe, which was created by ex-Flipkart employees, was acquired by Flipkart in 2016 and has so far committed an investment worth $500 million to develop the payment system and take on players like Mobikwik and Alibaba-Softbank backed Paytm, which also does mobile commerce on its wallet platform.

However, in comparison with Alibaba-Softbank-backed Paytm, PhonePe is far behind in terms of both transactions and users. Paytm claims to have 300 million users on its platform with about one billion transactions every quarter.

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