PhonePe to introduce new payment gateway. Credit: PhotoMIX-Company from Pixabay.

Indian digital payments provider PhonePe is set to introduce its own payment gateway in a bid to serve large entities that operate offline along with small and medium businesses, reported Moneycontrol.  

This move is expected to minimise the company’s dependency on external payment gateways.

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The proposed gateway is set to be an extended version of the firm’s existing UPI payment service, which is powered by quick response (QR) code, and in-app payments.

If launched, the new gateway is expected to offer competition to current players such as Paytm, Pine Labs and Razorpay.

A PhonePe payments representative familiar with the development was quoted by the publication as saying: “PhonePe had been working on this for a while.

“Around two months ago, they informed their payments partners that they are working on a payment gateway.

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“They had reached out to payment partners in good faith since they will be competing with them.”

Recently, PhonePe included a tab to facilitate transactions on its website. The tab has been added as a part of the solutions offered by the Walmart-backed firm.

However, the company did not confirm the latest development.

At present, PhonePe uses an interface to processes transactions for merchants. The interface is designed to allow users to send money through various options including UPI, credit and debit card.

Even though the company is yet to receive approval from the Reserve Bank of India (RBI) for its payment aggregator licence, it can operate as a payment gateway, stated stakeholders in the industry.

Last month, PhonePe was announced as one of the eight fintechs that received in-principle nod from RBI to function as account aggregator.

The approval has paved way for the company to launch the service in the next one or two quarters.