How PhonePe plans to beat Paytm in the payments game with this PoS ‘calculator’ 

While Paytm holds a significant market in QR code payments, PhonePe is hoping to embark on the next level of market disruption through this new PoS product

October 31, 2017 / 05:51 PM IST

Durba Ghosh

After QR and UPI payments solutions, Flipkart’s mobile wallet PhonePe is banking upon a unique PoS device – which looks like a basic calculator to beat Paytm in the market for payment solutions for merchants.

The new PoS device by PhonePe is backed by Bluetooth technology to imitate an offline instant payment possible through Near Field Communication.

While Paytm holds a significant market in QR code payments, PhonePe is hoping to embark on the next level of market disruption through this new PoS product.

“Any kirana store you see, they will have a calculator. We borrowed the idea from there to create this indigenous device. It does not require an internet connection and runs on a regular battery for several months. It will ease the transition of merchants into digital payments,” Rahul Chari, CTO of PhonePe told Moneycontrol in an exclusive chat.


“We are present in some large national retail chains. That's where we started from in our offline push. Now we want to start including local chains, mom-and-pop stores,” Chari added.

The company will launch the pilot rollout in Bangalore with 5,000 outlets, and will gradually expand the network to rest of India.

PhonePe plans to provide the device free of cost to merchants, with a security deposit attached.

“It is also inexpensive. A traditional PoS device costs about Rs 5,000, plus there is maintenance cost. PhonePe’s device has a landing cost of USD 10 or approximately Rs 600 to Rs 650,” Chari said.

The company is currently in the process of finalizing a domestic manufacturer for scaling up production.

The made-for-Indian-conditions device can work several months at a stretch on standard AA batteries and doesn’t need an internet connection, relying only on the consumer’s smartphone data connection.

“The (Indian) market is huge and there are parts of pie to address where we want to be. We are focused on increasing the number of transactions on the device, and not think of grabbing back market share or making money on the sale of devices,” Chari said.

PhonePe also plans to reach out to small and micro businesses in tier 2 cities and towns to penetrate deeper into the digital payments ecosystem.

On the peer-to-peer payments segment, PhonePe is planning to introduce more applications that will imitate several mobile banking features.

Chari did not specify but said other financial products such as insurance and loans could be a part of future offerings.

“We are working on several products in partnership with banks and other financial institutions. You will soon see something in that regard,” Chari said.

The PhonePe app also has an option to pay credit card bills, which according to Chari has shown good traction.

The unique combination of PhonePe being a UPI platform as well as a wallet has worked to its advantage.

The company has had 50 million installations till date and crossed 1 million transactions a day in October.

With Flipkart’s Big Billion Day sale, PhonePe claims to have surpassed 16 million transactions.

Flipkart, which acquired PhonePe last year, has committed an investment of USD 500 million to expand PhonePe’s operations, in addition to USD 75 million, it invested during acquisition.

Also Read: How Paytm Mall is planning to give Amazon, Flipkart a tough fight
first published: Oct 31, 2017 05:28 pm

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