MSMEs' ease of doing business: PhonePe, a digital payments business, entered the payment gateway services industry in India on Wednesday, formally la
MSMEs’ ease of doing business: PhonePe, a digital payments business, entered the payment gateway services industry in India on Wednesday, formally launching the PhonePe Payment Gateway with an exclusive limited time offer for new MSME merchants. PhonePe announced that it is joining the ranks of existing payment gateways in the country, including Paytm, Razorpay, PayU, Pine Labs, CCAvenue, Bill Desk, CashFree, and others, by providing free initial onboarding to new traders with no hidden charges, setup fees, or annual maintenance fees, whereas most payment gateways charge a standard transaction fee of 2%.
The free services, according to the company, could assist merchants with a monthly sales volume of Rs 1 crore save up to Rs 8 lakhs and possibly about Rs 2 lakh per month with no onboarding fees.
“With over 50% market share by value, PhonePe has become a market leader in UPI.” PhonePe launched its Payment Gateway business to offer the best-in-class payment process to consumers and merchants alike, citing its capacity to handle large-scale transactions and strong consumer trust in the platform.
The company’s payment gateway provides a no-code setup for platform integration and assists merchants in accepting online payments across Android, iOS, mobile web, and desktop.
Paytm, PhonePe’s arch-rival, started its payment gateway in 2012 and, in 2020, released an all-in-one payment gateway for SMEs that accepts digital payments across all payment methods without the requirement for a website or an app. There are no payment gateway setups or annual maintenance costs charged by the company.
PhonePe claims to have digitised over 3.5 million offline merchants and over 46 million registered users.
According to data portal Statista, the payment gateway market in India is expected to nearly triple in the next seven years, with a compound annual growth rate of 16.2 percent from roughly $4.79 billion in 2023 to $13.68 billion in 2030.
PhonePe announced the launch of its Account Aggregator (AA) services earlier this month, allowing customers to consent to the expressing of all their financial data, such as bank statements, insurance policies, and tax filings, with regulated financial institutions for a variety of use cases, including applying for loans, purchasing new insurance, receiving investment advice, and so on.
The two announcements on payment gateway and account aggregation services come just weeks after General Atlantic invested $100 million as part of a larger fundraising, raising the total investment from General Atlantic and its co-investors to $550 million.
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