India’s largest online retailer Flipkart has launched an online wallet—Flipkart Money—as it looks to make a push into the payments business. Flipkart Money would directly compete with the Alibaba-backed Paytm and Snapdeal’s Freecharge. This move comes at a time when Flipkart is expanding beyond its core business of online commerce. The e-tailer has been bolstering verticals like the ads business and has opened up its logistics platform EKart to other e-commerce players in an attempt to monetize newer avenues. According to sources familiar with the matter, the launch of Flipkart Money is the first step towards a broader presence in the payments space for the e-tailer. “Flipkart plans to provide more utility payments options via its online wallet for third party platforms and apps in the next few months,” a source told TOI. Paytm and Freecharge offer these services to consumers.
Flipkart Money is being run by FX Mart that was acquired by the e-tailer last year and which holds an RBI licence for prepaid wallets. Earlier, Flipkart had a closed wallet but after becoming a marketplace from an inventory-led model, the payment system could not be used for purchases from third party sellers. FX Mart had applied for payments bank licence as well but it did not get the nod from the RBI.
“This should bring down the share of cashless payments in the overall orders for Flipkart. Cashless payments are both cost and time efficient for e-commerce companies. Compared to its earlier closed wallet, FX Mart’s licence enables the wallet for use on third party platforms, which is currently in the works for a launch soon,” the source added. An email sent by TOI to Flipkart spokesperson remained unanswered.
At present, more than 60% orders made online are paid for through cash on delivery for major e-commerce majors like Flipkart, Snapdeal and Amazon.