Bengaluru | Pune: Google Pay and PhonePe are adding more storefronts to their payment platforms, in a bid to beat WhatsApp Pay’s imminent entry and explore alternative money-making avenues after the government waived processing fees on Unified Payments Interface transactions.
PhonePe’s Switch and Google Pay’s Spot, their commerce layers, are tying up with hundreds of businesses in the country, enabling them to open mini digital storefronts within the payment apps where users can browse for products and services.
This will aid easy user discovery without merchants having to spend heavily on technology. PhonePe said it had more than a hundred apps live on Switch and expects that to cross 500 by the end of the year. Consumer brands that use Switch include Domino’s, Oyo Hotels and Goibibo. Google Pay started Spot with seven merchants, including MakeMyTrip and UrbanClap.
“The ambition is to grow and acquire large and small businesses,” said Hemant Gala, the head of financial services and payments at PhonePe. “There is a commercial consideration. The value on Switch is more than the cost merchants would have incurred otherwise.”
Flipkart-owned PhonePe has also started selling financial products like mutual funds, insurance and tax saving products on the platform. It plans to launch more such products through the year. Google Pay started an Early Access Program on its Spot platform a few months ago and is working to make it available to a greater number of merchants.
“This unlocks a multitude of use cases such as a digital native business opening up another surface for discovery or an offline business creating their first presence online,” Google Pay product management director Ambarish Kenghe said. The idea right now is to help merchants drive discovery for their experiences on Spot, he added, with monetisation opportunities and commercial arrangements evolving depending on use cases.
After the government scrapped processing fees on digital transactions over the UPI railroad, building commerce platforms on PhonePe and Google Pay gives companies a way to monetise their platforms.
Last month, WhatsApp received regulatory permission to expand its UPI pilot to 10 million users. WhatsApp is confident that expanding payments will increase financial inclusion and in the long term, open up significant opportunities for users and businesses across India.
“Our initial focus will be to make payments on WhatsApp as easy as sending a message to friends and family to drive adoption of digital payments,” a WhatsApp spokesperson told ET.
Paytm has steadily grown ecommerce, ticketing, travel and financial services through the years, despite some initial hiccups. “We have a large payment ecosystem and UPI is only one part of it,” said Narendra Yadav, vice-president at Paytm.
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