Flipkart has announced an investment of $500 million in digital payments platform PhonePe, which it had acquired in 2015. This is the e-commerce firm’s biggest fund infusion in PhonePe that runs on the government-backed UPI platform and accounted for the highest number of transactions on it in August. PhonePe would utilize the capital to sharpen its technology offerings, acquire new customers, and expand its reach, Flipkart said. Also Read - Internet down: Zomato, Paytm, Disney+ Hotstar, Amazon, Myntra, many other global services suffered massive outageAlso Read - Zomato IPO: How to invest via bank, Zerodha, and Paytm Money
“PhonePe is a critical part of our overall strategy at Flipkart to build a comprehensive ecosystem for our customers. We re fully committed to make PhonePe the most preferred digital payments app in India,” Binny Bansal, Group CEO, Flipkart, said in a statement. Less than a week ago, PhonePe had received $39 million from Flipkart, according to its filings with the Ministry of Corporate Affairs. It had said that the funds would be used in team expansion and marketing activities. ALSO READ: We have seen 100 percent month-over-month growth post demonetization: PhonePe CEO Also Read - How to book COVID-19 vaccine slot via Paytm App, get Covaxin and Covishield shots with these simple steps
The current financing is one of biggest fintech investments in the country so far, but significantly lesser than the $1.4 billion SoftBank had infused in Paytm earlier this year. More recently, Amazon too had pumped in $245 million in the India operations of Amazon Pay as per its filings with the Ministry of Corporate Affairs. Amazon is keen to “make digital payments a habit for Indian customers”, and will invest in the necessary technology and infrastructure to grow the entire payments ecosystem in the country. ALSO READ: Amazon may be making big investments in Amazon Pay in India: Report
Flipkart too is now stepping on the accelerator. Post demonetization as PhonePe transactions soared, it started incentivising customers who purchased on Flipkart and made their payments through the app. Attractive cashbacks and discounts were rolled out during the Big Billion Day sale. Reports estimate that digital payments as a sector would touch $500 billion by 2020 accounting for nearly 15 percent of the GDP. “Fintech and e-commerce are among the most visible faces of a new Digital India that is powered by the youth and technology, and both are set for outstanding growth,” Flipkart’s Bansal concurs.