Published By : 13 Oct 2017 | Published By : QYRESEARCH
Indian online retailing giant Flipkart has announced an investment of US$500 million in its payments service, PhonePe. The service is a major component of Flipkart’s ever growing web of operations due to its affiliation to the brand and the increasing investment made in the sector by rivals such as Amazon Pay and Paytm. While Flipkart had earlier made a total investment of US$75 million in the payment module, the new funding represents a major step for the retailing giant, as it attempts to expand in the payments space to complement its growing retail business. The investment is expected to start coming in from later this year, with the first instalment of up to US$200 million likely to hit the floor around December or January 2018.
Flipkart aims to get a major stake in the offline organized market in the coming years, with PhonePe likely to herald the online retailer’s charge. The investment is likely to be utilized in improving the technology team of the venture and making the mobile application more diversely capable by adding more operating categories in its function. The technology team makes up more than 50% of PhonePe’s workforce at the present but needs more manpower to compete with the likes of Paytm and Amazon Pay.
Amazon recently upped its investment in its own payments arm, Amazon Pay, to more than US$300 million. With both PhonePe and Amazon Pay likely to witness significant usage in the ongoing festive season in India, which is renowned as the top revenue generation opportunity for online retailers, the stage could be set for an intriguing battle between India’s top retailers as they take on the payment giant Paytm in its own playing field.