Bengaluru-based Flipkart owned fintech firm PhonePe has taken yet another step to expand its presence in the offline payments segment. PhonePay has launched Point of Sale aka POS device to serve the needs of the small merchants. The company claims it is the ‘lowest cost’ PoS device in the world.
In an official statement, PhonePe claims, that the POS device is the first such product in the Indian digital payments space. It works like a traditional calculator commonly used in local stores.
Powered by Bluetooth technology, the POS device provides an experience similar to near-field communication (NFC). It is meant to serve merchants of all sizes – from kirana stores to petrol pumps and food chains to quick service restaurants (QSRs) among others. The consumers can bring their phone close to the POS device installed on the merchants’ outlet and it would automatically show the merchant details & amount to be paid.
The merchant does not need to have an Internet connection to confirm the success of a transaction. Apart from being low-cost, the device is portable and claims to have no scope for misuse. It can run for 8-12 months on AA batteries.
Commenting on the development, Sameer Nigam, CEO PhonePe said, “We are really excited at the potential of the PhonePe POS device. It ticks all the boxes for Indian shopkeepers to adopt digital payments rapidly – it is very cheap, easy to use and highly durable. The PhonePe POS will help accelerate the pace of digital inclusion for millions of local merchants and customers in India. At market launch, we will be giving the device for free to merchants, against a nominal security deposit.”
Talking about the technology Rahul Chari, CTO of PhonePe said, “The device has been built keeping Indian merchants and customers in mind. It does not require an internet connection and runs on a regular battery. The use of Bluetooth as the underlying technology makes the protocol used for the transaction robust and widely compatible. The solution provides several layers of security to ensure merchant and customer transaction safety.”
The device will be piloted in Bengaluru shortly with 5000+ merchants prior to a pan India roll-out and will be available for a security deposit of INR 699. “We hope to convert 30%-40% cash on delivery transactions to PoS-enabled payments in the next 18 months,” added Nigam.
A couple of weeks back, PhonePe had received a $500 Mn funding boost from its parent firm Flipkart. Prior to that, Flipkart had also invested $38.7 Mn in the company. The funding push seems to be in direction of the Flipkart’s keen interest in rapidly scaling up technology, reach and offerings of PhonePe.
In July this year, PhonePe claimed to have partnered with 25,000 merchants across the country to promote UPI-driven payments. PhonePe is currently working with YES Bank to launch new features with UPI 2.0.
Fintech is a rising sector in the Indian economy and after the demonetisation drive, new doors of opportunity have been opened for the fintech players. While initially the push was towards bringing consumer on the digital payments platform, now the fintech startups are battling to position their brand amidst offline merchants.
PhonePe is currently fighting the war on two fronts. One, it is leaving no stone unturned to get ahead of its fellow digital payment companies such as MobiKwik, Paytm and the government-owned UPI app BHIM. Also, Flipkart is pushing in PhonePe as a critical part of its overall strategy. The recent launch of POS device is yet another well-thought strategy on part of the PhonePe team to extend their reach in a 360-degree manner both to the merchants as well as the consumers. How far this strategy will take PhonePe in the current Indian fintech landscape will be worth watching.