Update (July 21): PhonePe confirmed to MediaNama that it has partnered with offline chains such as Apollo Pharmacy, Barista, Café Coffee Day, Spencer’s, KFC among others. The company has also tied-up with payment aggregator Commdel and is currently running a pilot at Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation Limited (HPCL) fuel stations. It also has a partnership with payments solutions company Pine Labs, through which the company expects to increase PhonePe’s acceptance at 15 more national chains across 18,000-20,000 outlets by the end of the current quarter (July-September 2017).
Earlier (July 20): Flipkart-owned payments company PhonePe is now entering the offline commerce space, reports VCCircle. Apparently, the offline payment option is already available at over 2,500 Apollo pharmacy outlets and all Barista outlets in Bangalore, Mumbai, Delhi and Ahmedabad. While the head of business developments at PhonePe, Pradeep Dodle told ETtech that they’ve already partnered with Barista, Cafe Coffee Day, KFC, Freshmenu, and Metro Cash & Carry among others. He also informed that interoperable unified payments interface (UPI) QR Code-based payments have also been enabled on PhonePe.
PhonePe will now offer short-term loans, along with installing point-of-sale (PoS) terminals at merchant stores. The company claims it will extended this to other major cities by the end of the current quarter (or by September 2017). We’ve written to them to learn more about this, and will update once we hear back.
In regards to offline payments, the ‘Offers‘ section of the PhonePe website already lists Cafe Coffee Day, and in May had also started allowing customers to pay for Flipkart’s cash-on-delivery orders via PhonePe.
PhonePe, which was acquired by Flipkart in April 2016, had launched an UPI-based Android app in partnership with Yes Bank, back in August last year, and by October had crossed 500,000 registered users. In May 2017, the company claimed to have processed 5.5 million transactions, of which UPI transactions accounted for 3.5 million or 70% of PhonePe’s overall transactions. Currently, PhonePe allows customers of 50 banks to pay via the app.
PhonePe vs Paytm
Paytm has been increasingly focusing on its e-commerce business Paytm Mall, especially the O2O commerce space which it recently entered. Paytm has started cataloging inventories of physical shops to enable discovery of products online. At these stores, consumers will be able to scan Paytm Mall QR codes in order to follow the store online, place orders and get offers, and pay via Paytm. The company also delisted 85,000 sellers from Paytm Mall to remove fraudulent merchants and fake products from the platform, and said it will be adding a further 3,000 agents to expand into tier-II and tier-III cities and towns to bring on board neighbourhood kirana stores and local authorised brand outlets. The reason Paytm has edge over PhonePe in the offline payments space is simply because:
- It is accepted at a larger number of merchant outlets. For the financial year ended March 31, 2017, Paytm processed 100 million offline transactions a month.
- It has a significantly larger user base. At the end of FY17, the company claimed it had 218 million wallets, however, it had not disclosed how many of them were active.