E-commerce marketplace Flipkart Ltd
has acquired Payments start-up PhonePe Internet Pvt. Ltd. which was launched
last December by former Flipkart executives. 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 have 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 focus on driving innovation on the payments
front. PhonePe is Flipkart third acquisition in payments, after it bought
payments start-up NGPay in 2014 and FX Mart Pvt. Ltd which owns a prepaid
wallet license.
PhonePe hasn’t launched a product
but is working on a payments solution around the Unified Payments Interface 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 part of a set of
government programmes and technologies, together called India Stack that
companies 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 mission is to significantly
improve the online and offline digital payments experience for Millions of
Indian customers.
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