Walmart’s entry in India has many viewpoints. There are certain things to the deal the company has made in India. Flipkart was the only way in and given that it has acquired every business of Flipkart and almost every brand. From the outside, it looks like Walmart walked into devil’s den as the new policy kicked in months after the acquisition. This has cost $5 billion to Walmart in its first year in the country. However, Flipkart has more to offer and Walmart is going to churn out money from its Indian bet.
PhonePe is another subsidiary that is doing extremely well. The payments application is one of the best in the country. It is UPI certified and people are loving it. They are using the application more than anything else right now. This has a lot to do with the digitization of the payments in the country. This happened during demonetization.
People in India are living in a different era at the moment with cash is not the first medium of payment. Although this is not true for the most part of India, it is mostly true when it comes to metro cities. To put it into numbers 95% of India still pays with cash. However, that five percent still accounts for 65 million people approximately. However, the transactions are supposed to reach $1 trillion by 2023. The number was put up by investment banking firm Credit Suisse.
The payments applications in India are a hit amongst the students. Almost all the students hate carrying cash around and they can directly pay using one of the applications. The other thing UPI certified applications like PhonePe offer is bank to bank transfer. Most of the students in India love this feature because they can immediately get money from their sponsors when in need. Otherwise, a normal NEFT takes around a day or two to reach the bank account.
That said, PhonePe is doing well in India. It looks after almost 8 million transactions a day. The company is looking to tie up with certain merchants which will take the current count of two million merchants to five million. The company is also looking at wealth management as it is going to put a hold on the loan part of the deals. Walmart India has already instilled PhonePe as a payment option in the 23 physical stores it has in India.
Walmart, however, has its own payments application in the name of Walmart Pay. But when you compare the success of the two, then PhonePe’s success is different and special. Given that only 65 million out of 1.3 billion people use digital payments. That said, Walmart is going to take PhonePe around the world. To be more specific it is going to take lessons from PhonePe and apply it in other countries.