PhonePe, the payment app backed by Flipkart, announced that it has crossed the 1 mln merchants milestone and plans to add another five million this year.
This is likely to help the company narrow the gap with market leader PayTM, which had an estimated 10 mln (1 cr) merchants in its network as of late last year.
PhonePe started courting offline merchants last year.
“Our offline business has shown phenomenal growth in barely a year and we are very thrilled to have reached the 1 million mark,” claimed Yuvraj Singh Shekhawat, Head – Offline Organized Business, PhonePe.
“We plan to grow offline merchant number to 6 million by December 2019.”
PhonePe enables offline merchants to accept payments from consumers through multiple instruments like UPI, Credit Cards, Debit Cards, PhonePe wallet as well as external wallets.
The leader in the space is PayTM, which took advantage of the demonetization move of the Narendra Modi government in last 2016 to extend its penetration across offline establishments.
The payment apps’ growth has been fueled by the so-called ‘cash back’ deals, supported aggressively using mass media campaigns.
Both PayTM and PhonePe are among the biggest advertisers in mass media.
Consumers, especially the younger generation, have grown used to paying for small purchases with mobile wallets as they win discounts or cash backs that can run into thousands of rupees every month.
PhonePe, which was acquired by Flipkart in 2016, was blocked by ICICI Bank and Airtel for violating some of the conditions related to the UPI or unified payment interface platform of India.
The issues were, however, resolved in a year ago.