While the debate on how much digital has India become still rages on, there is intense competition among the mobile payment gateways to corner the market share of the payments being processed. PhonePe can be described as a startup within a startup since it is owned by Flipkart and has adopted the Unified Payment Interface (UPI).
BHIM, the payment app launched by the Government of India under the Digital India scheme was considered to be the frontrunner using this UPI mode of processing mobile payments and it is patronized by the National Payments Corporation of India (NPCI), again a GOI special purpose vehicle set up for this purpose.
However, as per the latest figures, PhonePe has edged ahead in terms of the market share with 45% of the payments processed through UPI, while BHIM has around 41%. In terms of the absolute figures, released by NPCI, some 16.6 million transactions were processed through this route, of which PhonePe cornered 7.47million and BHIM had around 6.6million. All these figures relate to the month of August 2017.
For PhonePe this has been a remarkable leap from the levels of just around 3.5 million in the month of May; a jump of over 100% in just a couple of months.
The secret of their success lies in their ability to sign up merchant establishments from all over. This is a marketing effort and by focusing on large corporate clients with multi-city chain operations, they have been able to ramp up their operations. They are offering both online and offline options to the merchants to use their payment gateways.
Some of the prominent customers PhonePe has recently signed up include RailYatri, AbhiBus, Box8 and TicketNew for online and Apollo Pharmacy, Barista, Spencer's Retail and Café Coffee Day for offline transactions. The list has grown from 15 to 100 this year.
According to PhonePe, more than 70% of their transactions are being handled through the UPI route and they have plans to move ahead and bring in some add-on services for their customers. These may include reminders and also auto debit facilities for payments of repetitive nature, like utility bills and even EMIs.