Flipkart owned PhonePe has launched a unified payments interface-based (UPI) Android app in partnership with Yes Bank, reports LiveMint. The PhonePe app allows users to link their bank accounts to their smartphones using National Payments Corporation of India’s (NPCI) recently launched UPI libraries.
UPI is a payments architecture that will allow users to make a transaction without divulging their account details via aliases (such as vivek@yesbank) and make pull-based payments. The payments architecture was built upon the IMPS mobile payments system which let customers to transfer money across different banks with the use of a single identification and password. Through this, multiple bank accounts can be be linked to a single mobile banking application and money can be both received and requested through the same interface. More on that here.
Once a user registers on PhonePe, he/she will be allotted UPI-based ID which can shared with other customers to send or receive money. Users can authorize a transaction using a 4-6 digit MPIN, thereby eliminating need for OTP. Interestingly, according to an Economic Times report, Flipkart and Myntra have informed customers that Flipkart Money wallet and Myntra cashback will now be stored on the PhonePe wallet.
The app can also be used for other transactions like DTH, mobile, datacard, electricity and gas recharges. It also allows users to share/split bills with friends and withdraw funds back to the bank account. The app should help Flipkart and its properties Jabong & Myntra, integrate transactions, offers, discounts etc. more closely.
Flipkart Money: In March, Flipkart confirmed that it was testing a pilot digital wallet service named ‘Flipkart Money’, primarily aimed at cutting costs while handling cash refunds. Flipkart Money was to be a semi-closed wallet. However, the wallet service could only be used for payments and refunds on Flipkart. Note that it sounds like Flipkart will now integrate this feature with PhonePe itself.
Acquisition by Flipkart: PhonePe was started by three former Flipkart employees Sameer Nigam, Rahul Chari and Burzin Engineer in December 2015. In April this year, Flipkart confirmed that it bought out the payments company, but had said then that it would function as an independent business unit.
This was Flipkart’s third acquisition in the payments space. In September 2015, it acquired majority stake for Rs 45.4 crore in FX Mart, which holds a prepaid payments instrument license from the Reserve Bank of India (RBI), and in December 2014, it had acquired 65.71% stake in mobile payments platform ngpay.
Also read: Flipkart buys Jabong, and everything is cool