Flipkart owned digital payments app PhonePe is aiming to give a bigger thrust to its offline payments strategy in order to garner a larger share of the transactions from its offline business than online by the end of the year.
Pradeep Dodle, Head of Business Development at PhonePe told ET, “The average Indian is still doing a large chunk of his daily transactions offline, therefore from our current share of offline payments to online standing at 30 to 70, we hope to get a larger chunk from offline by the end of the year.”
In this direction, PhonePe is banking on the strategy of deploying its own point-of-sales (PoS) payment terminals at small merchant locations as well as partnering with major merchant chains at the national level to enable PhonePe-based payments at its outlets.
With these steps, the Bengaluru based startup hopes to capture a large share of the offline payments market. PhonePe had launched the POS device to serve the needs of the small merchants in November last year. The company claims it is the ‘lowest cost’ PoS device in the world.
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PhonePe also recently teamed up with the western and southern segment of the quick service restaurant chain McDonald’s and wholesale grocery chain Metro Cash & Carry to allow PhonePe consumers to make payments at their retail outlets. Additionally, with more such partnerships with national chains such as Cafe Coffee Day, Apollo Pharmacy, Spencer’s among others, the company plans to gain quick share in the offline payments segment as well.
Pradeep added, “Our partnership with McDonald’s has enabled UPI payments for the first time at their outlets. We have partnered with Pine Labs who deploy terminals at the stores and will allow customers to make payments from their PhonePe wallet, bank account, cards as well as our partner wallets like Freecharge and Jio Money.”
In addition to expanding its reach across the country, PhonePe plans to install 1 Mn terminals across 50 locations in the country and have around 50,000 stores where PhonePe payments are accepted. It is worthwhile noting that Flipkart committed $500 Mn to the UPI app in October last year.
The UPI-app claims to process over 1 Mn daily transactions worth over $15.4 Mn every day. The app has achieved a total Payments Volume (TPV) annual run rate of $6.1 Bn (INR 40K Cr) within 14 months of its launch. By introducing more in-app features, the company aims to double this metric by March 2018.
Consequently, PhonePe has been taking many steps in this direction by adding more apps on its platform as part of its in-app offerings. While the company had already added SafeGold to enable the buy-sell 24-carat gold feature on its platform on December 19, 2017, it also integrated the bus booking app RedBus’ facilities too last month. PhonePe will also soon introduce food ordering, groceries ordering, travel and entertainment apps from service providers over the coming months.
While 2017 ended on a high note for the Indian digital payments industry, with data sourced from Ministry of electronics and IT (MeitY) indicating 14.8 Bn digital transactions for the period between April 2017 till January 28, 2018, by focussing on offline payments, Flipkart owned PhonePe is gunning for a much larger pie as far as the overall payments space is concerned.
[The development was reported by ET]