Digital payments start-up PhonePe has received a funding of ₹518 crore from its parent firm Flipkart, a homegrown online retail giant. The funding is expected to help the firm tap India’s booming digital payments market and take on rivals such as Paytm, Amazon Pay and Google’s mobile payment service Tez. The funding came from Singapore-based Flipkart Payments Private Limited on March 19, according to a regulatory filing sourced from business intelligence platform Paper.vc.
It said the “number of securities allotted in the form of equity shares were 24,56,066.”
Flipkart had committed $500 million investment towards PhonePe. The Bengaluru-based firm had said it was going to surpass ₹80,000 crore in total payment volume (TPV) annual run rate by March this year. It had said that it was expecting to overtake Paytm to become the largest mobile payments company in the country.
Earlier in March, PhonePe lambasted its rival Paytm for its leadership claim in unified payments interface (UPI) transactions and termed it “uni-dimensional and misleading,” in a blog post.
Referring to the data from National Payments Corporation of India (NPCI), Paytm had said that it had registered 68 million UPI transactions in February 2018. PhonePe had done 28 million transactions. The firm said that it found out that Paytm’s average transaction value was less than ₹40, while PhonePe’s average transaction value was over ₹1,800.
The digital payments space in India is expected to rise fivefold to reach $1 trillion by 2023 and it would be led by the growth in mobile payments, according to a report by financial services company Credit Suisse. In February, online retail giant Amazon invested ₹195 crore in its digital payments arm Amazon Pay (India) Private Limited.
To take on competition, PhonePe said it was setting up an open payments ecosystem that would enable businesses of all sizes to build and deploy apps on its platform with a unified login and payments experience for customers. It is also implementing a strategy of deploying an indigenously designed point-of-sale (PoS) device that is powered by Bluetooth technology.