On Tuesday, Flipkart’s integrated payment system, PhonePe, announced its complete integration with Flipkart and its affiliates (Myntra and Jabong). Moreover, it also claimed to have completed 10 million downloads on the Google Play Store (as of yesterday).
Acquired in April of 2016 and founded by ex-Flipkart executives, PhonePe is a Unified Payments Interface (UPI)-based payments app that allows users to transfer money from one bank account to another directly.
According to co-founder and CEO Sameer Nigam, direct bank transfers (or P2P payments) are the major used case on the app, as of now. Similar to a mobile wallet, PhonePe also allows customers to get recharges, pay electricity, landline and gas bills, and make P2P transactions.
According to Sameer, the integration with Flipkart happened in three phases. The first came in September, with the launch of the interoperable wallet.
Then came the recall model in mid-October, where refunds (from a certain return) on Flipkart and its affiliate e-commerce brands would go to the PhonePe wallet. Customers could then download the app and verify their credentials to claim their refunds.
Third was another light SDK (Software Development Kit) for the android app, leading up to now, where PhonePe provides a complete inline native experience. This means that, apart from the existing options, there will also be an option to pay through PhonePe, which wouldn’t require an app.
Sameer further tells YourStory,
“Earlier, when you had refund money, you had to enter your bank details before asking for a recall of the product. That is a huge pain point we are solving. Now, merchants can pay you through PhonePe and you can take back the amount to your bank account.”
Completing 10 million downloads
Apart from the complete integration, PhonePe also announced crossing 10 million downloads on the Android Play Store yesterday. However, when YourStory checked the Play Store, it showed downloads only in the five million category.
When questioned regarding this, Flipkart said that it takes a week for Google to update their numbers on Play Store.
Moreover, just last month, in an interview with YourStory, Sameer claimed that PhonePe had reached close to four million downloads. When asked about the sudden increase of six million in less than a month, Sameer said,
A lot of things have helped us reach this viral uptake. Firstly, the government and Prime Minister have started talking about UPI, which seems to be creating a conscience in the minds of merchants and customers. Secondly, the recent launch of the BHIM app and the fact that it had issues booting up the next day helped us directly, spilling across some users.
Sameer adds that the last few months have been quite surreal for the firm, with every 72 hours yielding a new high.
Giving a perspective on the growth, he says that the firm grew 80 times in terms of organic downloads, and that it had stood at only one million downloads by the end of the first week of December.
Riding on localisation
PhonePe further announced that with the recent app upgrade, their payment service is now live in nine different languages, including Hindi, Tamil, Gujarati, Marathi, Bengali, Kannada and English.
Having an in-house team of linguistic experts, PhonePe has been adding three local languages every month, according to the company.
Localisation is a huge play for us. We believe that when we are giving an alternative to cash, language should be complimenting that alternative, rather than repelling potential customers from using a service.
According to Sameer, during trials (pilot), 40 percent of active usage happened in local languages, but in reality, only 20 percent of it happens through localisation. The company is also pushing across audio apart from text manuals.
While localisation seems to be a big part of PhonePe’s strategy, the company’s iOS app is also expected to be available by the end of this week.
While not disclosing any figures around daily transactions and merchants on its network, PhonePe claims that its SDKs will also be available to other merchants soon. At present, the SDKs are rolled out solely for the Flipkart merchant network.
By May-end, the company is aiming to have a network of 100,000 merchants transacting on its platform.
Sameer says that in the near future, the company will be focusing on some key areas. First would be expanding its really large merchant network, which would be followed by focusing on specific types of transactions while bringing innovation to P2P transactions.
Just yesterday, it was announced that the BHIM ((Bharat Interface for Money) mobile application has recorded 10 million downloads, within 10 days of its launch.
Flipkart’s PhonePe (powered by Yes Bank) seems to be giving BHIM quite a run for its money, especially at a time when mobile wallets seem to be facing the heat.
A UPI-based payment system like PhonePe charts above mobile wallets in the following ways:
Money is interoperable: This means that consumers can “unswipe” their wallet balance and put it back into their bank accounts, or just make a payment directly into someone’s bank account, without having to load money into their wallet first.
No transaction charges: Since it’s a direct bank-to-bank transfer, there are no transaction fees involved.
Therefore, with the likes of Paytm subscribing to PhonePe’s SDKs and planning to launch their own UPI platforms, the payments space is expected to see a complete overhaul in the year to come.
Also, the news comes just a day after PhonePe’s parent company, Flipkart, saw some restructuring in its top leadership. Yesterday, it was announced that Kalyan Krishnamurthy will be the new CEO of Flipkart, while founder Binny Bansal will take over the role of Group CEO.
As a part of the restructuring, PhonePe’s Sameer Nigam is expected to report to Group CEO Binny Bansal.
(With inputs from Athira Nair)
Tarush is driven towards delivering unbiased and accurate reportage while engaging with as many mediums as possible to narrate a fresh perspective. Working for the past few years in the digital space with YourStory, he has covered the Indian technology ecosystem extensively, focusing on new age Fintech companies, while building strong connects within the industry.