How Flipkart-owned PhonePe aims to reinvent UPI
What's the story
Propelled by demonetization, cashless transactions saw a rise with Unified Payment Interface (UPI) trying to usher users towards a cashless economy. While UPI did march some users towards P2P (Person to Person) payments, it failed to attract P2M (Person to Merchant) payments. And now, to address lower P2M payments, Flipkart-owned PhonePe wants to reinvent UPI through Standing Instructions and Interoperable Point-of-Sale terminals. Here's how.
Modus Operandi
How PhonePe's PoS will work
PhonePe's PoS won't require Internet access and with deployment cost of less than $10, PhonePe aims to attract other payments companies to be a part of this platform. The terminal, via bluetooth, will send the device ID and amount to user's phone. The users can then select their payment preference - through PhonePe app, credit or debit cards or any other wallet.
How?
Reinventing UPI
While different payment options like QR codes or sound-based payments have had mixed success, PhonePe is betting that its PoS machines can effectively be the one-point solution. PhonePe plans to open up their platform to other UPI-based payments as well for which the National Payments Corporation of India (NPCI) will have to add this feature to the core library of UPI.
The Details
PhonePe's partners with IOCL
As a first step towards accelerating the pace of digital payments, PhonePe has partnered with Indian Oil Corporation Ltd. In a pilot project, PhonePe's recently announced calculator-like PoS terminals will be deployed at 30 IOCL petrol pumps. This is a crucial partnership, given IOCL retail sales span across 26,000 outlets, with nearly 1.5 crore customers and a daily turnover of about Rs. 800 crore.
Information
PhonePe PoS soon to be at an outlet near you
So far, PhonePe has 10,000 PoS units installed in Bengaluru with another 50,000 units in tow. The company has a goal of installing 1 million units and has already placed the order.
Ease of payments
Through the lens of a customer and competitor
From customers' perspective, the PhonePe PoS devices may offer convenience, as they support PhonePe's wallet, FreeCharge, Jio Money, card payments, and perhaps very soon, other UPI apps as well. However, for competitors to come onboard, it would require all their transactions to pass through PhonePe. Hence, at a time when data is extremely important to safeguard users' interest, companies may think twice about this.