Flipkart‘s PhonePe resolves issues with ICICI, claims 70x growth

Transactions on PhonePe app were blocked by ICICI Bank citing security concerns in January.

Nigam took to the micro blogging site Twitter alleging that the private lender was doing this 'on purpose' which was affecting their transactions.

"The matter has been amicably resolved. The services have been restored. I think a lot of this is due to the fact that UPI itself is nascent. The standards are evolving. Everyone will push the use case, the standards will emerge and will be redefined. I think some of this is the part of the course. Obviously we weren't thrilled with how it played," Nigam said.

Talking about the scope of growth and whether demonetisation would slow down with the cash coming back to the economy, Nigam said, transactions such as salary payments to house helps or other person to person transactions are bound to go digital and that there is a lot of room for growth. He claims that there hasn't been any slowdown in the transactions.

PhonePe was founded in December 2015 by Nigam, Rahul Chari and Burzin Engineer. It was acquired by Flipkart in April, last year in order to boost its online payment platform at a time when rivals Snapdeal and Paytm had strong payments platforms.

"Demonetisation just provided the impetus, we provided tools for doing so. So we are not seeing any lowering in the number transactions every day," he said. Before PhonePe, Flipkart had acquired two more payment startups -- FX Mart, which in 2016 and NGPay in 2014.

PhonePe allows customers to store money in their bank accounts and the transactions can directly happen from bank to bank. 

"We allow consumers to keep their money in their bank accounts and the transaction repeat rates are very healthy. So we have growth nearly 65-70x in the last three months," he added.

The company however nearly missed the race during the demonetisation period as compared to payments firms Freecharge (owned by Snapdeal), Mobikwik and Paytm, who were all over to grab consumers and market share in the online payments space.

PhonePe however claims, given that it allows customers to transact directly from their bank accounts its average transaction size is much larger than pure mobile wallet firms.

In January PhonePe was reported to have over 10 million download on GooglePlay. Its overall number was not immediately available.

It was however way lower than 185 million user base claimed by Paytm or 50 million users claimed by Mobikwik.

Without sharing the exact amount, Nigam claimed that the average ticket size is in thousands of rupees.

PhonePe cites, person to person transfers to be its biggest use case with people using PhonePe to pay salaries to maids and drivers, paying rents or splitting bills etc.

The company stresses that it has no plans to get into the cashback race. 

"We are deliberately going slightly slow, simply because we want to have great products. Our P2P is growing by word of mouth or organically because the consumer app itself is a testimonial to the experience that we can deliver. And we want to have similar solutions for the offline segment. The only thing other companies are doing right now is cashback, we don't want to join that track," he said.

The company is also reported to be in talks with global payments firm PayPal to raise funds.

Nigam declined to comment on that.Follow @priyankasahay