Flipkart owned PhonePe CEO Sameer Nigam unperturbed by likely entry of Amazon Pay, says aims to double transactions every 2 months

Published: November 2, 2017 6:10 AM

Flipkart owned digital payment platform, PhonePe which has crossed a million transactions a day in October believes it is just scratching the surface given the potential of online transactions in the country.

Flipkart owned digital payment platform, PhonePe which has crossed a million transactions a day in October believes it is just scratching the surface given the potential of online transactions in the country.

By Ondrila S Sarkar 

Flipkart owned digital payment platform, PhonePe which has crossed a million transactions a day in October believes it is just scratching the surface given the potential of online transactions in the country. Unperturbed over the likely entry of Amazon Pay on UPI platform or Paytm starting their banking operations, PhonePe founder and CEO Sameer Nigam said it has set a target of doubling its volume of transactions every two months in an interview with FE’s Ondrila S Sarkar. Excerpts:

What has been the growth in daily transactions volume for PhonePe?

Last time this year we were doing around 5,000 transactions and we crossed the 1 million transactions a day run rate earlier this month, so we have grown over 20 times. It has been a phenomenal year from that stand-point. Our target is our offline business which is right now at 5,000-6,000 a day, to reach a million transactions a day. Our online and in-app use cases have already exploded this month. Since it is more a question of creating awareness, more merchants are coming in. We have just started offline and we want to see the same story repeated there and we believe we can do that.

How many offline merchants are currently transacting on PhonePe?

Currently 25,000 merchants are live with our offline solutions and this covers a range of very large chains like Apollo pharmacy, KFC, CCD and also really small merchants in Bengaluru. So among the national key accounts we have stitchted together most of the market now and by January we will be able to get majority of the national accounts. Among cities we are focusing on are, Bengaluru, Mumbai, Delhi, Hyderabad and Chennai. Bengaluru is where we are targeting all the small shops and this is where we want to test the unorganised market which is one of the hardest segments to crack.

Would you attribute the decision of demonetisation just a year ago as the key reason for PhonePe’s growth?

Without demonetisation, UPI would not have got the boost it needed as a nascent operation. Just before demonetisation HDFC, SBI & most of the larger PSU banks were not on UPI. It was largely, ICICI, Axis, YES bank & a few others. So it brought them into UPI very quickly and within a couple of months the government announced the BHIM app which was built on UPI. We benefitted a lot by coming into UPI very early. We decided to take a long bet on it sometime in August 2016.

Around 95% of the people we were meeting said that we were crazy since the banks would never agree to inter-operability. That was the main question we had and our view on it was that they may never agree, but if they do India would be a market unlike any other. We decided to build out the simplest interface we can and that’s all we did. As far as demonetisation is concerned, honestly this has given a big boost to the payments industry, there is no question about that. UPI has grown more than any other instrument and our bet paid off just as much.

Amazon Pay might soon launch a UPI integrated platform. How will that impact you?

Competition is good right now, everyone should be aiming for insane growth since the consuming market is that large. If you look at Tencent, they have 600 million daily active customers, we are 1% of that. India’s digital payments penetration is so poor right now. We have set a commitment to double every two months and we have been hitting it without missing a single target for the last 12 months.

Do you plan to enter the financial services space of lending?

I do not want a payments bank license. Today KYC has become mandatory for wallets and the limit is the same – R1 lakh for both wallet and payments bank. Moreover, the payments bank has to pay savings interest. I’am better off without it. Interoperability is there anyway so what’s the point being a bank. I am not a banker but an application and hardware guy. I am not saying that I will never do it, we may evolve there 5 years down the line.

What according to you is slowing down financial inclusion?

On merchant’s side, when cashless came there was very little motivation to switch to digital payments. The journey is being led by consumer demand. Consumers walk into a shop and say I want to pay with a debit or a credit card. I think inertia in India is even higher because cash is a language which both parties understand. Now smartphones and cheap data prices are leading to a much faster penetration.

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