Flipkart to pump Rs 670 crore in digital payments biz
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Flipkart plans to invest over Rs 670 crore ($100 million) over the next three years to build an independent digital payments business, aimed at helping India's largest online retailer reduce its dependency on cash transactions and grab a slice of the growing market for online payments said a report in The Economic Times.
The Bengaluru-based company will launch a new product, which will work like a digital wallet while also allowing consumers to pay online without using either a card or a net-banking service, as it will be built on the government-approved technology platform — Unified Payments Interface.
To be spearheaded by PhonePe — the payments start-up which was acquired by Flipkart in April this year — the product is expected to be ready for use in coming weeks. "This is a longterm strategic bet for us, and we believe PhonePe could become as big as Flipkart one day," said Binny Bansal, CEO of Flipkart who has identified payments as one of the four key pillars that will drive growth for the Bengalurubased company.
Designed as an omnichannel product, PhonePe will be a container for multiple payment solutions which includes a semiclosed loop wallet and "have a tie up with a large bank for UPI," according to Sameer Nigam, founder of PhonePe who now leads the payments business for Flipkart. These plans come at a critical juncture for the nine-year old company, which is fighting to maintain its dominance in India's fast growing online retail market.
Rival Amazon India acquired Emvantage, and is eyeing the digital wallet space as well. Snapdeal acquired payments company Freecharge last year and Paytm owns a strong digital payment franchise, while others in the fray include Mobikwik. As more Indians begin to pay online, digital wallets have seen a significant surge.
