PhonePe, which is Flipkart’s payments arm, is all set to enter the financial services sector. The company, which will begin by selling mutual funds through the app, is looking to tap into their growing consumer base of millennials who are looking for ways to manage their wealth.
Mr. Sameer Nigam, the co-founder, and chief executive officer of PhonePe, said a new entity called ‘PhonePe Wealth Services’ has been set up for this purpose. He added that the company’s regulated businesses like the mobile wallet and Unified Payments Interface (UPI) would function under one entity, while the new unregulated businesses would function under a separate entity.
PhonePe was acquired by e-commerce giant Flipkart three years back. Since its acquisition, PhonePe has become a critical standalone business for Flipkart, with more than 30 million transacting customers on a monthly basis.
Mr. Nigam mentioned that PhonePe will build its financial services business by way of partnerships with existing players in the market. On the other hand, Paytm, which entered the financial services sector last year, has created a standalone team for its financial services business.
PhonePe currently has more than 25 digital apps on its platform, including Oyo and Goibibo. Mr. Nigam said that PhonePe has brought a number of leading travel apps on its app, and that other verticals would see additions, as well. The company’s plan is to have around a range of major apps on its platform to enable users to purchase services directly through PhonePe. In China, WeChat and Alipay, which function in a similar manner, offer a whole range of services within their respective apps.
To this end, Flipkart has committed a total of $500 million to PhonePe. PhonePe is said to have exhausted around 50% of the amount.
Source: The Times of India