Flipkart on Friday said it had bought PhonePe, a mobile payments company founded by its former employees for an undisclosed sum.
Co-founded by ex-Flipkart employees Sameer Nigam and Rahul Chari, PhonePe is building India’s first unified payments interface (UPI)-based product, Flipkart said. PhonePe will function as an independent business unit of Flipkart.
UPI, planned to go live in April, will allow users to transact using unique identification and mobile phone numbers or virtual payments address without sharing any other bank details.
Anyone with a bank account can perform instant transactions by using mobile phone. This is in contrast to the present payments process, which involves entering numerous account/card details and multi-level interventions.
“Payments has been one of the biggest hurdles for mass adoption of online shopping in India. UPI has the potential of transforming the entire payments ecosystem in the country. The acquisition of PhonePe is in-line with Flipkart’s focus on driving innovation on the payments front," Binny Bansal, CEO, Flipkart said.
In September 2015, Flipkart acquired payment services firm FX Mart for Rs 45.4 crore. FX Mart has a prepaid wallet license that would allow its customers to use the money stored in the wallet to buy goods on Flipkart platforms and other associated partners.
“PhonePe’s mission is to significantly improve the online and offline digital payments experience for millions of Indian customers. We are really excited to merge with Flipkart and get access to one of the largest consumer bases in the country, which will allow us to realize our vision at a much larger scale,” Sameer Nigam, Co-founder, PhonePe said in the state.