Flipkart-owned digital payments company PhonePe has received Rs 518 crore of fund infusion from Flipkart Payments, a Singapore-based subsidiary of the e-commerce giant. The investment is part of the $500 million commitment Flipkart made to invest in PhonePe last year.
The Economic Times reported that in a filing with the Ministry of Corporate Affairs, PhonePe said it received Rs 518.2 crore in lieu of 24.5 lakh equity shares in the company.
The infusion of cash comes at a key time for the payments company as global players like Google and Whatsapp are trying to stake a claim of the payments pie and local rival Paytm is aggressively pushing it’s UPI service.
PhonePe, which has tied up with Yes Bank for processing UPI payments, was one of the first entrants into this space. The company remains one of the biggest players in the space, last month, PhonePe accounted for 28 million UPI transactions with a total value of Rs 5,120 crore.
PhonePe and the UPI wars
In February, PhonePe accounted for 16% of all UPI transactions, whereas Paytm responsible for 40% of all UPI transactions. Paytm used these numbers to claim the crown of the market leader in the UPI space.
PhonePe had some interesting comments to make on Paytm’s massive lead when counting the number of transactions.PhonePe said while Paytm “seems to be leading the market” in terms of the number of transactions, the average value of such transactions is much lower at Rs 38 compared to its own average transaction value of Rs 1,820.
The average PhonePe customer does about five transactions per month, while for Paytm that number is 525. The blog post claimed that the high number of transactions on Paytm was “simply not representative of normal user behaviour on the UPI network.”
This is not the first time that PhonePe has questioned Paytm’s expansion in India’s booming digital payments business. In January, PhonePe co-founder Sameer Nigam had indicated in a tweet that Paytm’s volumes on UPI had been inflated by Re 1 cashbacks. Nigam later deleted the tweet.