Flipkart launches online wallet to take on rivals like Freecharge and PayTM
Flipkart Money has been launched on Android devices, where it can be topped up with Rs 10,000 at a time using credit card, debit card and net banking.
The launch of Flipkart Money comes at a time when online wallet providers Paytm, Freecharge and MobiKwik are raking up millions of users, enticing them with cashbacks and discounts. These firms have primarily used bill and prepaid mobile payments for customer acquisition. Chief executive Binny Bansal had in an interview with ET in February identified payments as one of the four pillars of Flipkart’s business, alongside ecommerce, logistics and advertising.
The launch of Flipkart’s semi-closed prepaid instrument comes after the company acquired a majority stake in Punjab-based FX Mart last year for about Rs 48.5 crore. FX Mart, which holds a licence from RBI for operating a prepaid payment instrument till August 2019, is powering Flipkart Money.
Flipkart Money has been launched on the company’s Android app, where users can hold a balance of Rs 10,000 at a time. Consumers can top up the wallet with a maximum of Rs 25,000 a month using their credit cards, debit cards or via net banking.
Cash can be withdrawn from the wallet to the cards or the bank account. Money is part of Flipkart Wallet, which includes WS Retail Credit (WS Retail is the biggest seller on Flipkart), gift cards and other bank cards saved on the online retailer’s platform. The digital wallet can presently be used only for payments on Flipkart.
Flipkart Money is expected to be helpful for quick refunds, especially in the case of cash on delivery payments that account for a majority of its transactions. On an average, 15% of ecommerce shipments end up in returns, according to experts tracking the industry.
This could mean huge numbers for Flipkart, as the company has said that it aims to sells goods worth $12 billion in the year ending March 31, a three-fold increase compared with the prior fiscal year.
Analysts said Flipkart could also use the wallet to drive a strategy to give cashbacks rather than discounts to consumers, keeping them on the platform. “Etailing companies will be moving this year to cut discounts, and cashbacks work on platforms where frequency of usage is high and consumers are making routine purchases,” said Harminder Sahni, founder of retail consulting firm Wazir Advisors.