Flipkart’s payments arm PhonePe has launched a Bluetooth-powered calculator for small merchants in a bid to ramp up its point-of-sale (PoS) presence as competition from rival Paytm intensifies. PhonePe will soon be piloting the device with 5,000 merchants in Bengaluru, where the firm is headquartered, before releasing it across the country. The device, costing Rs 699, would be distributed for free, but PhonePe would be charging a refundable deposit.

The PoS device resembles an electronic calculator which will display the bill amount to customers, who can then bring their smartphones close to it. Because the device is Bluetooth-enabled, it doesn’t need an internet connection to function, and customers can get the bill amount displayed on their smartphones almost instantly provided they keep their Bluetooth on. This does two things – it eliminates the dependence on an internet network which is often patchy. And, it also speeds up the pace of a digital transaction making it more smooth. ALSO READ: India is just scratching the surface of digital payments acceptance: Mastercard Country Officer Porush Singh

“The PhonePe PoS will help accelerate the pace of digital inclusion for millions of local merchants and customers in India. At market launch, we will be giving the device for free to merchants, against a nominal security deposit. It ticks all the boxes for Indian shopkeepers to adopt digital payments rapidly — it is very cheap, easy to use and highly durable,” Sameer Nigam, PhonePe founder and CEO stated. The device runs on rechargeable battery, the company added. ALSO READ: Flipkart invests $500 million in PhonePe to improve its reach and technology

On the face of it, a PoS device is smart innovation by PhonePe given the high entry barriers among offline merchants. While online transactions have soared for PhonePe since demonetization, making it the most-used UPI-based app, physical reach is critical for attaining scale. On the other hand, its chief competitor Paytm boasts 5 million merchants on its network — several of them include local grocers, small eateries, fuel stations and more. Paytm has in the past underlined the importance of a O2O (online-to-offline) strategy.

PhonePe too seems to be following that path, now that it is flush with $500 million in funds infused by parent Flipkart earlier this month.