India’s prominent e-tailer Flipkart has provided a funding of Rs 452 crore to PhonePe, its digital payments arm. The funding comes from Flipkart Payments, a Singapore-company which itself (as the name makes it clear) is a subsidiary of Flipkart.
According to documentation from Paper.vc, cited by Livemint, PhonePe received the newest funding from Flipkart in July. With the fresh inflow of cash, Flipkart hopes to strengthen the position of PhonePe in the digital payments sector, which is dominated by the likes of Paytm and MobiKwik. In addition to private names, government-backed platforms like UPI (Unified Payments Interface), and payment systems of individual banks have made the competition in the segment even stiffer.
This is the second time that Flipkart has provided funding to PhonePe this year. Back in March, the e-commerce company had infused Rs 518 crore into the digital payments platform. The investment was part of the $500 million commitment that Flipkart made to financially back PhonePe last year.
Few months back, PhonePe had dismissed rival Paytm’s claims of being the leader in UPI-based transactions as “unidimensional and misleading”. PhonePe alleged that Paytm’s transaction values were “clearly influenced by significant per-transaction cashback incentives that appeal to a very small part of the population”.
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In related news, it was reported earlier today that Competition Commission of India had given its nod to Flipkart’s proposed acquisition by U.S. retail behemoth Walmart. In May this year, Walmart had agreed to pay $16 billion for acquiring a 77 percent stake in Flipkart.