PhonePe, one of the leading digital payments firms in India backed by global retail giant Walmart, has announced its foray into the insurance, mutual fund and instant-cash segments to tap the fast-growing digital payments industry, which is expected to touch $10 trillion by 2027.
PhonePe, according to sources, wants to leverage its fast-growing user base, now consisting of 18.5 crore people, to enter the insurance as well as instant-cash markets.
“PhonePe is bullish on the finance sector and has come up with various offerings in the insurance and mutual fund segments. We can expect more announcements for the finance sector in future from the digital payments major,” they said.
Insurance/ fund offerings
The Bengaluru-based fintech firm has announced two major tie-ups — with Aditya Birla SunLife Mutual Fund and Bajaj Allianz General Insurance — to offer its users benefits on mutual funds and travel.
PhonePe’s tie-up with Aditya Birla Sun Life Capital (ABSLC) will allow its users invest in ABSLC’s liquid fund.
The partnership aims to offer investments in high-quality debts and money market instruments, and offer reasonable returns with high levels of safety and convenience of liquidity over short term, ABSLC said.
PhonePe users can make investments as low as Rs 500; they can transfer and withdraw these in a few steps.
Under its tie-up with Bajaj Allianz General Insurance, PhonePe offers its users cover on up to 1 million kilometres internal travel for a starting price of just Rs 216.
It also offers users instant refunds with no cancellation charges before the travel start date, and 24x7 international travel assistance to them throughout the journey, across 220 countries. Both leisure and business travellers can purchase travel insurance on the PhonePe app.
Kiranas as ATMs
PhonePe said its unique ATM initiative can resolve concerns over under-penetration of cash withdrawal facilities in India by enabling its users to receive money from their nearby kirana store.
It has already begun a pilot project in Delhi, wherein users can find local stores from where the ATM facility can be availed, from a list on the app.
Customers can use PhonePe to transfer the amount needed to the shopkeeper’s account and take cash from him. There won’t be any charges for customers or merchants to avail this service.
The withdrawal limit for customers will be the same as the limit set by their banks.