SRINAGAR: PhonePe will enable digital payments acceptance for over 25 million small merchants over the course of a year, including kirana store owners across 5,500 talukas. The company will hire a 10,000 on-ground fleet for this.
Flipkart-owned PhonePe at present has 11 million offline merchants on its platform, as it looks to go deeper into tier 3 and 4 towns with this expansion. The Bengaluru-based firm will also provide offline merchants digital services like receipts and reconciliations through its ‘PhonePe for Business’ app.
This comes at a time when payment firms are looking at kiranas as part of the next phase of their expansion and rushing to install technology solutions at offline retail points. The pandemic-induced lockdown caused severe disruptions in the supply chain, forcing e-commerce behemoths to shift their strategies to hyperlocal and source essential goods from neighbourhood stores to deliver to customers.
A recent EY survey of kirana store owners across 12 Indian cities shows that as much as 40% of respondents were keen to partner with online delivery and supply chains, with 20% of them already leveraging online platforms.
Earlier in April, Reliance Industries’ e-commerce platform JioMart went live in areas of Navi Mumbai, Thane and Kalyan, allowing users to place orders from kirana stores in the vicinity. E-commerce major Amazon India, in June, announced the launch of Smart Stores, which allowed kiranas to have a digital storefront.
Through the launch of Smart Stores, Amazon Pay allowed users to explore products available with a kirana, and shop for them by either paying through UPI or converting the transaction amount into an EMI.
“Kiranas and merchants across small villages and towns are striving to progress and prosper. We are really excited to partner with them in this journey and take digital payments to the last mile of India across every village and town,” said Vivek Lohcheb, vice president – offline business development, PhonePe.
Mint had first reported that PhonePe has partnered with logistics firm Shadowfax to pilot hyperlocal deliveries for its offline kirana merchants in Bengaluru.
PhonePe’s arch-rival Paytm claims that 67% of its transactions on its platform comes from tier 2 cities and beyond, an improvement from around 50% for the Noida-based payments bank in 2018.
Apart from e-commerce firms, large card network platforms and Indian banks are working to seize this opportunity. In June, Mastercard India, Axis Bank Ltd and payment service provider, Worldline India, partnered to launch a digital point-of-sale solution, Soft POS, to help offline merchants and kirana stores accept payments using their smartphones.
Apart from digital payments, the solution stack also offered merchants – E-Khata for store credit transactions, a cash register to record transactions at store and an online dukkan, where merchants can catalogue their products for consumers to make online orders for home deliveries.

KR Desk