Kirana shop owners registered with Walmart India’s best price stores will now be able to pay for their purchases using Unified Payment Interface (UPI) mode of digital payments via PhonePe app on their smartphones.
The digital payments app has entered into a partnership with Walmart India to enable its more than 1 Mn best price members, mainly kiranas, to draw funds from their a bank account using the UPI payment option.
“The PhonePe payment system will help our members streamline their business processes and spend more time in their stores with customers,” the statement said, citing Walmart India president and CEO Krish Iyer.
The current partnership, however, will only benefit shop owners registered with Walmart India’s best price stores. The US-headquartered company owns and operates 23 best price modern wholesale stores in India, offering nearly 5,000 items in a cash and carry wholesale format.
Walmart-Phone expects that the initiative will greatly benefit kiranas and other small businesses that do not have a credit card, debit card or e-wallet, and relies on cash to purchases from Best Price stores.
PhonePe CEO and founder Sameer Nigam expects the partnership will enable kiranas to digitise their payment transactions, from taking payments from consumers to paying at best price stores for their own purchases.
Walmart’s Flipkart Acquisition Driven By PhonePe
PhonePe’s digital payments strength is one of the driving factors for Walmart to invest in the Flipkart group. When Walmart bought a 77% stake in the ecommerce major Flipkart for about $16 Bn, last year, it also added fintech company PhonePe, and fashion ecommerce companies, Myntra and Jabong, as part of the acquisition.
Flipkart bought PhonePe in 2015 from its founders Sameer Nigam, Rahul Chari and Burzin Engineer. The total investment by Flipkart in PhonePe is $184.1 Mn. As of December 2018, PhonePe claimed to have crossed 1 Bn transactions. In fact, PhonePe had achieved the top spot with 40% share of the overall UPI transaction in July last year, with more than 100 Mn transactions, mainly through partnerships with major retail chains across India.
Besides UPI payments, PhonePe also offers peer-to-peer (P2P) transfers, QR Code solution for utility recharges, bill payments, gold purchases, among others. Reports suggest that PhonePe is reportedly in talks to raise funding from private equity firms KKR and General Atlantic LLC, as it looks to achieve the valuation of $10 Bn. The company was valued at $1.5 Bn when Walmart bought Flipkart.
This year in January, PhonePe also launched its own wealth management unit, PhonePe Wealth Services, with an initial authorised capital of $7.12 Mn (INR 50 Cr) and paid up capital of $2.85 Mn (INR 20 Cr).