Flipkart finally launches own digital wallet

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Flipkart, the country’s largest e-commerce entity, has launched its own digital wallet, PhonePe.
This plugs a crucial gap in its payments game against rivals Snadeal and Paytm, backed by Chinese giant Alibaba.
Flipkart says it hopes for over $1 billion (Rs 6,600 crore) in transactions by the year-end from this move. PhonePe is integrated with the new Unified Payment Interface (UPI), allowing users to directly transact from their bank account and not store funds in their mobile wallet.
Flipkart had actually acquired PhonePe in April and then adopted UPI, which aims to make individual wallets irrelevant. Since then, it has redesigned the product and entered into a strategic tie-up with YES Bank, to convert PhonePe into a bank-backed wallet that allows users to do peer to peer transactions, buy goods or pay bills.
“We have some very very aggressive plans right now,” said Sameer Nigam, chief executive officer of PhonePe, in a telephonic interview. “As a measure, we’re looking to get to about 10 million active customers by the end of the year and probably 25-30 mn registered users in the same time.”
Flipkart has been late to the payments game after its initial experiments failed. While rival Snapdeal acquired mobile recharge from Freecharge in April 2015 for $400 mn. Since then, Snapdeal brought former Airtel Money chief executive Govind Rajan to run the business, shifted its technology team to Bengaluru, focused on faster transaction time and forged partnerships with both YES Bank and MasterCard. It also expanded partnerships with retailers and business partners to reach out to more consumers. Read More

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