India Payments Roundup: Paytm, Amazon and Flipkart
The battle for e-commerce and payments domination is on in India.
Paytm, an e-payment/e-commerce brand and payments bank, is bringing the QR code scanning habit to the Indian masses, while rival Flipkart has raised $2.5 billion from Japan’s SoftBank and Amazon has launched its digital wallet.
Paytm, which has been at the forefront of QR-based payments in India, now offers a feature for users to scan any non-Paytm QR code generated using open standards.
Launched in 2010 (Paytm Bank was launched later, in spring 2017), Paytm has more than five million merchants—from small roadside vendors to large retail outlets—using its platform for payments transactions.
“Our latest feature will enable consumers to scan generic QR codes using the Paytm app and facilitate enhanced on-the-go discovery for all QR-linked products and services,” says Deepak Abbot, Paytm’s senior vice-president.
The paytech firm hopes the project will also aid its quest to instill a QR code scanning habit in India.
“We believe QR codes are the most convenient method to discover and buy a product,” Abbot states.
Big Deals Continue
Meanwhile, e-commerce marketplace Flipkart Group has announced an investment—a mix of primary and secondary capital—from Japan’s SoftBank Vision Fund, which The Economic Times reports as being valued at $2.5 billion. This is the biggest ever private investment in an Indian technology company and will make the Vision Fund one of the largest shareholders in Flipkart, the company said.
The investment is part of the previously announced financing round in which Flipkart had raised capital from heavyweights including Tencent, eBay and Microsoft. After this financing round, Flipkart said it will have in excess of $4 billion of cash on its balance sheet.
“This is a monumental deal for Flipkart and India. Very few economies globally attract such overwhelming interest from top-tier investors,” said Binny Bansal and Sachin Bansal, co-founders of Flipkart. “It is recognition of India’s unparalleled potential to become a leader in technology and e-commerce on a massive scale.”
The Flipkart Group is India’s largest e-commerce marketplace and includes group companies Flipkart, Myntra,
Jabong, PhonePe and eBay.in.
Finally, Amazon has launched its digital wallet, Amazon Pay, in India to rival established players such as Flipkart with its PhonePe solution and the aforementioned Paytm.
Amazon Pay can now store the money instead of the money going to gift cards, as was the case before. Amazon offers the gift card service together with Qwickcilver and this partnership will continue, Amazon says.
However, the e-wallet has advantages over gift cards as it does not have an expiration date. Also, it now enables customers to shop outside Amazon at several other retailers.
Amazon holds a prepaid payment instrument licence from Reserve Bank of India and can make online shopping using its Amazon Pay wallet an easy process, compared with payments done by debit/credit cards (as consumers are usually routed to their bank’s website to complete a transaction).
Customers can use Amazon Pay like any other digital wallet, bypassing the two-factor authentication.
Amazon recently made an investment of IND 130 billion (US$202.6 million) into its payments business in India.
In its Independence Day sale, it has offered additional cashback deals on its new digital wallet.
Portions of this article first appeared in Paybefore’s sister publication, Banking Technology.