Flipkart on Friday announced the acquisition of Bengaluru-based PhonePe, a mobile payments company, to enable a "highly secure hassle-free digital payments experience."
Co-founded by ex-Flipkart employees Sameer Nigam and Rahul Chari, PhonePe is building a Unified Payments Interface (UPI) based product, which will allow bank account users to transact using their unique identification and mobile phone number or virtual payments address. Payments are made using the Immediate Payments Service (IMPS) to transfer funds immediately, without sharing any other bank details.
PhonePe is Flipkart's third major acquisition in the payments space, following its acquisition of NGPay in September 2014 and FXMart in September 2015. A month ago, Flipkart had launched its wallet - Flipkart Money - powered by payments firm FX Mart on its Android app.
PhonePe has not released its app yet, but according to its website, the app can be used to pay and receive money, pay bills, shop online and offline without having to input OTPs or other pin numbers.
"UPI has the potential of transforming the entire payments ecosystem in the country. The acquisition of PhonePe is in-line with Flipkart's focus on driving innovation on the payments front," said Binny Bansal, CEO, Flipkart, in an emailed statement.
The PhonePe team will transition to Flipkart but will function as an independent business unit, Flipkart said. Terms of the acquisition were not disclosed.