Says will emerge as largest mobile payments firm in March

Flipkart-owned digital payments start-up PhonePe said it is expecting to overtake Paytm next month to become the largest mobile payments company in the country. The Bengaluru-based firm said it is going to surpass ₹80,000 crore in total payment volume (TPV) annual run rate by March this year.

“I think ‘value wise’, we would overtake (Paytm)... by March-end. Right now, they are the largest,” said Sameer Nigam, co-founder and CEO of PhonePe, in an interview.

The company said it achieved TPV annual run rate of ₹58,000 crore and processed 45 million transactions in January this year.

‘Open ecosystem’

Mr. Nigam said his firm had an edge over players such as Paytm, MobiKwik and Google’s mobile payment service Tez, as it is setting up an open payments ecosystem. This would enable businesses of all sizes to build and deploy apps on its platform with a unified login and payments experience for customers.

For example, in January it formed a strategic partnership with online bus ticket booking service redBus. The firm had gone live with an exclusive store on the PhonePe app.

“We are building an open ecosystem at a meta level, for consumers, merchants and banking, financial services and insurance,” said Mr. Nigam. “Most payment players are [just focussing on] consumers and merchants and are trying to create a walled garden around it.”

‘Indigenous device’

To take on competition, the company is also implementing a strategy of deploying an indigenously designed point-of-sale (PoS) device that is powered by Bluetooth technology.

The device works and looks like a traditional calculator and costs about ₹600. It is aimed at serving merchants of all sizes — from ‘kirana’ stores, petrol pumps and food chains to quick-service restaurants.

The company recently entered into a first-of-its-kind partnership with Indian Oil Corporation Limited (IOCL) for the adoption of these devices at IOCL retail outlets.

As part of this partnership, customers can pay using the Unified Payments Interface (UPI), credit and debit cards and the PhonePe wallet.

They can also pay via other external wallets such as Jio Money and Freecharge for their fuel purchases, through the PoS device at IOCL’s retail outlets in Bengaluru.

PhonePe is live with 10,000 units of such PoS devices in Bengaluru. It is aiming to go live with one million PoS devices across 50 cities by the end of 2018.

“The whole purpose of putting out a PoS (device) is due to our learning, on the street. Also, India knows how calculators work,” said Mr. Nigam.

The company said it was opening up its software development kit (SDK), a programming package that enables a programmer to create applications for a specific platform.

This means various payments players can integrate their service with PhonePe’s PoS device.

“You can’t prevent anyone’s innovation cycle if you want to really win. We are opening it (SDK) up and exposing ourselves to the competition, instead of taking the other approach,” said Mr. Nigam.

Besides this, PhonePe’s parent company Flipkart had committed $500 million to help the company take on rivals such as Paytm and Google Tez.

The company said it has now got about 21 million active users. It is being accepted by more than 60,000 online and offline merchants including Cleartrip, PVR, Café Coffee Day and Apollo Pharmacy.