Flipkart acquires UPI-based payments start-up PhonePe1 min read . Updated: 04 Apr 2016, 01:38 AM IST
PhonePe is Flipkart's third major acquisition in payments, after it bought payments start-up NGPay, and FX Mart, which owns a prepaid wallet
E-commerce marketplace Flipkart Ltd on Friday said it has acquired payments start-up PhonePe Internet Pvt. Ltd, which was launched last December by former Flipkart executives Sameer Nigam, Rahul Chari and Burzin Engineer.
Mint reported earlier today that Flipkart was in talks to acquire a majority stake in the company for an amount between $10 million and $20 million.
The PhonePe team will join Flipkart but will function as an independent business unit.
“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. I am delighted that two Flipkart veterans—Sameer and Rahul—are at the helm of this initiative," said Binny Bansal, chief executive officer, Flipkart, in a statement.
PhonePe is Flipkart’s third major acquisition in payments, after it bought payments start-up NGPay (Jigrahak Mobility Solutions Pvt. Ltd) in 2014, and FX Mart Pvt. Ltd, which owns a prepaid wallet licence last August.
PhonePe hasn’t yet launched a product, but is working on a payments solution around the Unified Payments Interface (UPI), an initiative of the National Payments Corp. of India, which will allow fund transfer between banks and will make inter-operability between banks and instant payments possible by using a single identifier like the Aadhaar number or a virtual address.
The UPI is a part of a set of government programmes and technologies, together called India Stack, that companies can use to slash costs in offline authentication and provide services legally approved by the government to anyone with a mobile phone. The UPI is set to be formally launched in April.
“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," said Sameer Nigam, co-founder, PhonePe.