Bengaluru: India’s largest e-commerce firm Flipkart Ltd launched mobile wallet Flipkart Money for consumers on mobile operating system Android, 18 months after it shut down its payments gateway PayZippy.
The relaunch comes on the heels of its September acquisition of payments services start-up FX Mart Pvt. Ltd, which holds a prepaid wallet licence. Flipkart originally planned to launch the wallet before the company’s Big Billion Day sale in mid-October. Mint reported on 14 October that the wallet launch will be delayed as the Reserve Bank of India (RBI) sought more details of Flipkart’s acquisition of FX Mart Pvt. Ltd, which holds a prepaid wallet licence. The launch was further delayed because of tech and product issues.
Finally, Flipkart launched the wallet this week, six months after buying FX Mart.
It’s not clear if the company will open up Flipkart Money to other sites.
The wallet would also help Flipkart increase the proportion of cashless transactions, and cut operational costs involved with cash on delivery payments.
Flipkart did not reply to an e-mail seeking comment.
The Bengaluru-based company shut PayZippy in August 2014 after the product failed to sell to as many customers as the company had expected.
With e-commerce booming, payments have become an essential part of the strategies of companies like Snapdeal and Flipkart. Last year, Snapdeal acquired FreeCharge for $450 million in April, and Ola (run by ANI Technologies Pvt. Ltd) launched its own wallet for use across e-commerce platforms.
It’s not just commerce platforms that operate wallets. Start-ups such as Mobikwik, Oxigen, PayU, Citrus Pay, and Novopay too have raised significant funding to help make digital payments easier.
Currently, the market leader in this space is Paytm (run by One97 Communications Ltd), followed by Freecharge. Paytm has three in every 10 smartphone users using their app, according to a February report by Nielsen.
Paytm founder Vijay Shekhar Sharma became one of the 11 recipients of an in-principle approval for a payment bank licence issued by RBI, with which services like savings, deposit, payment and remittances can be provided to shoppers.
According to the Nielsen report, the most popular mobile payment apps are those that provide services over and above pure payment like mobile recharging, ability to book movie tickets, shopping and so on, which is where companies like Paytm and e-commerce platforms like Flipkart have an edge over those that just provide the utility of a wallet.
FX Mart, too, had applied for a payment bank licence but didn’t get one in the first lot of licences issued by RBI. Started in 2013 by entrepreneur Amit Narang, the company offers electronic payments, foreign exchange and travel services.