PhonePe wants to dethrone its Alibaba and SoftBank-backed rival, Paytm, claiming that additional capital that Walmart will bring to the table will help it grow much faster
Flipkart’s digital payment app PhonePe is looking at tapping the resources of US retail giant Walmart, which on Wednesday announced it was acquiring 77 per cent stake in the Indian e-commerce firm for $16 billion, to become the largest digital payments service provider in the country in the next two years.
PhonePe wants to dethrone its Alibaba and SoftBank-backed rival, Paytm, claiming that the additional capital that Walmart will bring to the table will help it grow much faster.
The mandate seems to have arose after Walmart CEO Doug McMillon said that PhonePe had the potential to become an ecosystem driver for all of Flipkart.
“The goal is to become the market leader in two years,” asserted Rahul Chari, co-founder and chief technology officer, PhonePe.
With more investment flow, Chari feels a domino effect will come into play which will lead to greater energy being spent on R&D giving rise to more innovations.
“When you bring in good talent and have a culture of solving problems through technology, you automatically start seeing a lot of innovations,” he said.
The company is tight-lipped about a big feature launch coming up in June.
It claims it has rolled out several innovations such as a Point of Sale (PoS) machines that make it affordable and easy for even small kirana stores to accept digital payments.
It is also partnering with several online service providers such as RedBus to bring their platforms directly onto its own app and website.
The online payments market is swelling rapidly with more people embracing the digital platform.
Even global players such as Google and WhatsApp have jumped onto the online payments bandwagon.
In a bid to take on the international players, Flipkart had infuses Rs 518 crore of fresh capital into its payments app arm in March.
Walmart executives in a call with investors also expressed excitement in getting to play in India’s digital payments space through its investment in Flipkart.
PhonePe is hopeful that the enthusiasm of the retail giant will translate to more investments, which will ultimately help it take on Paytm.
Vijay Shekhar Sharma-led Paytm dominates the fast-growing digital payments space, holding 33 per cent share of the 190 million UPI-based transactions that were registered last month.
It is also the leading digital wallet provider in the country.
PhonePe, however, has rubbished such claims saying the average value of transactions by Paytm were much lower at Rs 40 in March compared to its own average transaction value of Rs 1,800.
Even after becoming a member of a global family like Walmart, the Flipkart payment arm will continue to focus on local problems looking for technologies to solve them as it sees huge scaling up opportunity in India.
“There are no global plans on the horizon,” said Chari.