Flipkart has acquired of PhonePe, a Bangalore based mobile payments company started by its former employees as it looks to build a payment business to catch up with local rivals Snapdeal and PayTM. PhonePe will function as an independent business unit. The details of the transaction were not disclosed, but the deal is not cash transaction.
- Founded in December, Phonepe is building a product where payments can be made by just using just mobile number.
- This is based on Unified Payments Interface (UPI), a new process in electronic funds transfer being launched by National Payments Corporation of India.
- Flipkart has made several failed attempts to enter the payments space, through wallet and payment processing gateways. It had previously launched a closed wallet in 2011, however following its shift to a marketplace model in April 2013, it was forced to restrict this wallet to products sold only by WS Retail, a company hived off by Flipkart to comply with India’s FDI regulations on retail.
- Flipkart had applied for license through its payment gateway business Payzippy in July 2013, however it was unsuccessful to secure a license until the e-commerce major shut Payzippy in November 2014.