PhonePe has partnered with the IRCTC to facilitate payments on the IRCTC Rail connect Android app. The partnership will enable PhonePe’s 100 million plus users to pay from their bank accounts using UPI, credit, debit cards and also the PhonePe wallet for their travel bookings. The development was reported by the Economic Times.
Interestingly, this development comes nearly 4 months after we reported that IRCTC was working on launching its own payment gateway. This was a way for the IRCTC to seek additional revenue and reduce dependency on third-party payment platforms.
PhonePe will be able to access a sizeable share of the near 700,000 e-ticket bookings made every day on IRCTC. In May, we reported that of the reported 700,000 bookings, 100,000 or 14% were paid for via Paytm, which made it the leading payment mode for train ticket purchases at the time.
Other payment players on IRCTC
- In February, Razorpay partnered with IRCTC to help customers book train and flight tickets through UPI, in addition to existing payment modes like net banking, wallets and credit/debit cards. Razorpay said it expected to process more than a million transactions a month on the IRCTC website and mobile app.
- In October last year, MobiKwik’s payment gateway, Zaakpay, partnered with IRCTC’s Rail connect app for users pay through channels like debit card, credit card, net banking, ATM cards, and mobile wallets. But it did not include UPI as a payment option. This was despite Zaakpay having allowed UPI payments through a separate partnership with ICICI Bank.
- Paytm and PayU also integrated their payment gateways with IRCTC back in September 2016. Previously, IRCTC had to have individual tie-ups with banks.
PhonePe’s funding & expansion
Last week, Flipkart Payments, the Singapore-based subsidiary of the e-commerce giant, infused Rs 451.66 crore into PhonePe. This followed Flipkart’s earlier investment of Rs 518 crore in PhonePe in March this year. The investment is part of the $500 million commitment Flipkart made to invest in PhonePe last year, in addition to the $75 million funds it infused since acquiring PhonePe in 2015.
The massive amounts of investments coincide with PhonePe launching a variety of new services this year, including tie-ups with Goibibo, RedBus, Mumbai Metro and Ola Cabs whose services would be available in the PhonePe app. PhonePe has also been building its offline payments business to expand its customer base. To this effect, the company acquired Zopper Retail, a hyperlocal point-of-sale platform for small and medium businesses. PhonePe also developed its own PoS (Point of Sale) device based on Bluetooth technology to process and boost its offline transactions. It has also reportedly tied up with several retail chains including Café Coffee Day, Apollo Pharmacy, Barista, Spencer’s, KFC, FoodWorld, Pai International and Goli Vada Pav.
All the investment and partnerships appear to have paid off as PhonePe claimed that it was the largest UPI-based payments player in the country with a 40% share of the market in July. According to data from the National Payments Corporation of India (NCPI), Unified Payments Interface (UPI) has reported 235.6 million transactions in July. While PhonePe had said that it clocked over 100 million monthly transactions in July, its biggest competitor Paytm reportedly registered 73 million transactions in the month.