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Payments and e-commerce companies have for some time been engaged in an elaborate digital roleplay.
Over the last few years, Amazon, Flipkart, and Swiggy have all launched their own versions of a payments play. And payments companies like Phonepe and Paytm* ventured into hyperlocal commerce. These are two very different sets of companies with very different business realities, yet united by one sentiment—how to make their millions of users count in more ways than one.
So far, the jury has been out on who has had better luck in building out their alter egos.
Last week, however, Phonepe’s own verdict arrived. India’s largest payments company announced it was shutting down its nearly two-year-old quick-commerce bet, Pincode.
The IPO-bound company’s CEO, Sameer Nigam, said that operating yet another B2C quick-commerce app was distracting from its core mission of helping its offline merchants improve growth and operational efficiency in their existing business. It will instead focus on B2B tools for merchants.
For Phonepe, it became apparent that pursuing quick commerce was a wasteful endeavour at a time when the likes of Blinkit, Swiggy, and Zepto were gobbling up the market.
Pincode’s revenue was merely about Rs 10 crore but suffered losses of Rs 280 crore from this business, according to its annual report for the 2025 financial year.
“You need nothing less than $2–3 billion in investment if you need to crack a large-scale business in the country,” said a quick-commerce executive.
Phonepe is no stranger to cash burn, but the question is: what will it come at the cost of?
Merchants of India
When Phonepe launched Pincode in April 2023, it was its big push into e-commerce. It was a natural extension. The company already had millions of merchants—what if it could do more than just enable payments? It could be a winning proposition both for itself and for its merchants.
Phonepe will know that you are buying medicines every month. And Phonepe will know you are buying Rs 314 of medicines every month from the same pharmacy. Phonepe will get Pincode and say, “Pincode, go get this pharmacy on board. Here is a customer I have who is buying Rs 314 of medicines every month from this store.”
Will Flipkart become Phonepe before Phonepe becomes Flipkart? The Ken
Moreover, the digital infrastructure for e-commerce was all laid out.
Phonepe became the payments leader by building on government-backed digital infrastructure like UPI. With Pincode, it hoped to undertake hyperlocal commerce by building once again on the government-backed Open Network for Digital Commerce (ONDC)—an initiative aimed at democratising e-commerce.
Phonepe didn’t leave anything to chance with this venture.
