Flipkart’s PhonePe launches PoS machine for small merchants

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Bengaluru: Flipkart’s payments arm PhonePe on Tuesday said it has launched its own point of sale (PoS) device based on Bluetooth technology for kirana stores, petrol pumps, food chains and other merchants to accept digital payments, as the company accelerates its offline expansion.

The device is designed as an electronic calculator to make it easy for shopkeepers to use them (most stores anyway use regular calculators).

To make payments, customers need to bring their smartphones close to the PoS device which will automatically display the bill amount on the PhonePe app. Since the device works on Bluetooth, merchants don’t need an internet connection.

PhonePe will initially sell 5,000 such devices, which will cost the company Rs699 per piece, in Bengaluru and launch in other cities early next year, chief executive Sameer Nigam said. It will distribute the devices free of cost but charge a refundable deposit.

“The PhonePe PoS will help accelerate the pace of digital inclusion for millions of local merchants and customers in India. At market launch, we will be giving the device for free to merchants, against a nominal security deposit. It ticks all the boxes for Indian shopkeepers to adopt digital payments rapidly—it is very cheap, easy to use and highly durable,” Nigam said.

The launch is part of PhonePe’s strategy to establish its platform as the pre-eminent digital payments brand. While tens of millions of shoppers use digital payments to buy things online, very few physical stores offer convenient options to customers to pay digitally. PhonePe, which operates on the Unified Payments Interface (UPI) platform, competes with bigger rival Paytm, the Bhim app, which is owned by the National Payments Corp. of India (NPCI), and others in India’s fast-growing payments business.

“The device has been built keeping Indian merchants and customers in mind. It does not require an internet connection and runs on a regular battery. The use of Bluetooth as the underlying technology makes the protocol used for the transaction robust and widely compatible. The solution provides several layers of security to ensure merchant and customer transaction safety,” PhonePe chief technology officer Rahul Chari said.

PhonePe is Flipkart’s big bet in digital payments after several failed attempts. Earlier this month, Flipkart said it will invest $500 million in PhonePe to expand its payments arm. The commitment is in addition to the $75 million infused by Flipkart in PhonePe since it acquired the latter in April 2016.