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Flipkart launches digital wallet Phone Pe, targets $1 billion transactions

flipkart digital wallet

 

Flipkart, the country’s largest e-commerce entity, has launched its own digital wallet, PhonePe said a report in the Business Standard.

This plugs a crucial gap in its payments game against rivals Snadeal and Paytm, backed by Chinese giant Alibaba.


Flipkart says it hopes for over $1 billion (Rs 6,600 crore) in transactions by the year-end from this move. PhonePe is integrated with the new Unified Payment Interface (UPI), allowing users to directly transact from their bank account and not store funds in their mobile wallet.

According to the report, Flipkart had actually acquired PhonePe in April and then adopted UPI, which aims to make individual wallets irrelevant. Since then, it has redesigned the product and entered into a strategic tie-up with YES Bank, to convert PhonePe into a bank-backed wallet that allows users to do peer to peer transactions, buy goods or pay bills.
 

Flipkart has been late to the payments game after its initial experiments failed. While rival Snapdeal acquired mobile recharge Freecharge in April 2015 for $400 million. Since then, Snapdeal brought former Airtel Money chief executive Govind Rajan to run the business, shifted its technology team to Bengaluru. It also expanded partnerships with retailers and business partners to reach out to more consumers.

Paytm, also backed by Alibaba, continues to dominate the digital wallet space, while expanding into the e-commerce space to convert a majority of its 100-plus million users as customers to transact on its platform.

Each of these companies offer cash-back within the wallet, to entice users.

“UPI is a watershed moment in the digital payments industry, not only in India but worldwide. I’m thrilled that PhonePe and YES Bank are working together closely to spearhead the digital payments revolution in India,” stated Binny Bansal, co-founder and group chief executive at Flipkart.

UPI, officially launched last week, itself makes closed wallets of companies irrelevant. Flipkart is banking on the UPI-integrated PhonePe to tap into the 75 million users of Flipkart, Myntra and Jabong to enable them to transact on its platform without worrying about storing money in a digital wallet.

 

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