Phonepe - Kanil PRwire

PhonePe The Walmart-backed business is now the most valuable fintech in India after raising $350 million in a new round of funding from General Atlantic at a valuation of over $12 billion. PhonePe is a payments and financial services unicorn. According to a statement released on January 19, the company plans to raise $1 billion in tranches during this round.

PhonePe is the company’s spin-off from fundraising e-commerce startup Flipkart, announced in December. The Flipkart spin-off also completes PhonePe’s transition into a fully India-resident company, starting in 2022.

PhonePe has now become a decacorn or startup company valued at over $10 billion, joining the ranks of Flipkart, which Walmart acquired; Paytm, which went public last year; Byju’s and Swiggy. PhonePe’s valuation has also exceeded Razorpay, the digital payments and neo banking unicorn, valued at around $7.5bn.

The business said in a statement on January 19 that PhonePe will use the funds to make infrastructure investments, including data centre development.

The business also plans to invest in new businesses, including insurance, wealth management and lending. The company said PhonePe would also focus on UPI Lite and Credit on UPI.

The new fundraiser in the middle of startup funding winter is a rare case of a late-stage round in which investors write small checks when the macro environment deteriorates. When Flipkart spun off PhonePe as a separate entity, its value was $5.5 billion. Flipkart had put in $700 million at that time.

PhonePe’s fundraising has seen its valuation tumble by over 60 per cent since its nearest rival, Paytm, went public in November 2021, prompting public shareholders to question the company’s ability to reach profitability. Paytm had a total market capitalization of over $4.3 billion as of January 19.

But Paytm’s revenue is much more than PhonePe. As of FY22, Paytm’s revenue was Rs 3,892.40 crore, while PhonePe’s revenue was Rs 1,646 crore. Furthermore, PhonePe reported a loss of Rs 2014 crore in FY22 (2021-22), which enlarged from Rs 1729 crore in FY21 (2020-21). Paytm reported a net loss of Rs 2,325 crore for FY22, widening from Rs 1,560 crore in FY21.

PhonePe’s fundraising arrives at a particularly difficult time for fintech corporations in India, as the Reserve Bank of India (RBI) has struck the sector hard, impacting businesses across the board.

Additionally, valuations of technology and financial services companies have declined significantly this year due to macroeconomic uncertainties amid a broad correction in global financial markets. In October, Prosus-owned PayU backed out of a $4.7 billion Billdesk deal in one of the country’s biggest stress indicators over fintech valuations.

PhonePe was launch in 2015 by former Flipkart executives Sameer Nigam, Burzin Engineer and Rahul Chari.

The fintech is the market leader in Unified Payments Interface (UPI) transactions. Also, fintech has over 400 million registered users. The company has 47 per cent market share in monthly UPI volumes.

In 2017, the corporation developed into financial services, permitting customers to buy gold, insurance and mutual funds and make bill and utility payments on its platform.

On September 5, PhonePe started developing its payment gateway to extend its current quick response in-app payments and (QR) code-based UPI payment service.

The company will compete with Paytm, Razorpay and Pine Labs as it may offer its payment gateway to large offline players and small and medium-sized corporations.

In the last year, PhonePe has acquired GigIndia, Wealthdesk and OpenQ and completed the long-awaited acquisition of IndusOS.

More News: Rbi Moots Charges on Payment Systems; Can Impact Gpay and Phonepe Dealings

Scarlet Samson

The Reserve Bank of India (RBI) has proposed to charge various institutions to use its payment system. The proposed fees will apply to banks, corporate institutions, and payment system operators, also known as non-bank financial institutions. The payment system’s cost will be from 0.5% to 2% of the transaction price. Fees resolve on institutions that use the payment system.

On Wednesday, the Reserve Bank of India (RBI) sought public views on fees and fees in payment systems to make such transactions cheaper and financially remunerated. The RBI said the study conducts through web-based questionnaires. The central bank said that the survey would also help people assess the impact of such allegations.

The Reserve Bank of India has accused the payment systems, including immediate payment service (IMPS), National Electronic Fund Transfer (NEFT) system, Real Time Gross Settlement (RTGS) system, and Unified Payments Interfaces (UPI). Provision of Payment and Settlement System Act. Payment system operators are charging for not following the provisions of the Act and not complying with RBI instructions. Payment system operators must follow the Act’s instructions and RBI.

The central bank issued a discussion letter on the allegations in the payment systems. RBI States that the RBI initiative in the payment systems focuses on reducing friction, which may arise from systemic, procedural, or revenue issues.

On Friday, the Reserve Bank of India (RBI) sought public views on 40 specific questions regarding fees and levies in payment systems. The Reserve Bank of India has set a time limit on October 3. The Reserve Bank of India has also asked questions on the principles. Of the Bank of India along with the scope and implementation of the Payment and Settlement System Act, 2007.

If you are a consumer who wants to pay, you probably have a lot of intermediaries in the transaction. Nowadays, paying with credit cards, debit cards, or even smartphone apps for consumers is not uncommon. The consumer uses these middlemen to deliver using a wide range of methods paid by the consumer. While the payment transactions chain has many mediators, consumer complaints are usually about high and non-transparent fees.

The Reserve Bank of India (RBI) has determined the ground rules for payment systems, stating that prescribing fees for payment services and competitive for users and the optimal revenue stream for intermediaries. The RBI determines the ground rules for payment systems saying that the price for payment services should appropriate and competitively selected for users and provide optimal revenue streams for mediators.

“To ensure this balance, it was considered beneficial to make a comprehensive review of various fees levied in payment systems by highlighting different dimensions and demanding stakeholder feedback.

The fees in a payment system are the cost paid by the payment service providers (PSPs) to users (original or beneficiaries) to facilitate digital transactions. Payments recover from the promoters or beneficiaries based on the type of payment system.

In fund transfer payment systems, a fee-charging by the promoter of the payment instruction—these implemented as an add-on to the amount set aside for remittances.

In the case of a merchant payment system, the fees recover from the money’s final recipient (merchant). The exemption usually does that for equal deduction from the amount received by the merchant or the amount received by the merchant.

Entities are involved in providing the cost of digital payment services, which are typically charged to a merchant or customer or borne by one or more participants.

While there are both advantages and disadvantages for customers to these allegations, they should appropriate and should not become an obstacle to adopting digital payments; RBI said earlier.

Lakshya

I am Lakshya Verma, a man of diverse interests and talents. By day, I dedicate myself to the field of pharmacy, working tirelessly to improve the well-being of others. However, once my workday comes to an end, you will find me embracing the freedom of the open road on my motorcycle, relishing in the invigorating sensation of the wind rushing through my hair. I have a deep passion for embarking on thrilling adventures, and I have been fortunate enough to explore numerous corners of the globe. Through my travel blog, I take pleasure in sharing my experiences and stories with a wider audience. Furthermore, my love for writing has led me to establish KanilPRwire, an SEO agency that assists brands in expanding their online presence. Whether I am developing life-saving medications or crafting captivating blog posts, I approach each endeavor with unwavering enthusiasm and determination. As a versatile and multi-talented individual, I am living proof that one can merge multiple careers into an extraordinary and fulfilling life.

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