SBI Wakes Up To Ecommerce; Signs MoU With Amazon For Payment, Eyes Deal With Snapdeal & PayPal
India’s largest bank State Bank of India (SBI) has decided to embrace eCommerce in a big way. Signifying that they are now going full throttle into this new, digital economy, SBI has announced their partnership with Amazon for providing payment and commerce solutions.
Additionally, reports are coming in that within this week, they are also going to sign similar deals with Snapdeal and Paypal as well.
SBI-Amazon MoU for SMEs
SBI has signed a deal with Amazon, according to which, they are going to develop high end payment and commerce solutions for their common customers and small scale businesses. It seems that both Amazon and SBI have several small scale business ventures as common customers, and this MoU will all set to benefit them all.
SBI Chairman Arundhati Bhattacharya said while announcing this MoU: “Amazon is a very large company in the digital commerce space. We have a very large group of customers who could benefit by getting connected with this platform. The idea of the MoU is that we can try and give customers a good experience in both buying and selling.”
It is indeed a brilliant strategic move to say the least. By inking this deal, SBI can create robust, scalable and effective digitalized ‘frictionless’ payment solutions for Amazon and at the same time enable their SME customers to sell on Amazon’s platform. Additionally, SBI will also provide these SMEs and small business owners loan to scale up their operations.
Arundhati also said, “E-commerce as a sector is at an inflection point and SBI stands with all stakeholders, including retail customers, SMEs clientele, and logistics companies, in facilitating this change,”
She also indicated that SBI can directly sell their financial products on Amazon, which can again be a game changer. No other banks, as of now, sell such financial products on any ecommerce platform.
Partnerships With Snapdeal & Paypal
As per reports coming in, SBI is all set to sign such MoUs with leading B2B ecommerce platform Snapdeal by the end of this week. Insiders are stating that talks are already on in Kolkata regarding such possibility.
Snapdeal boasts of 3 crore+ customers as of now, who are actively shopping on their website. Almost 60-70% of the orders received on Snapdeal originate from Tier 2 and Tier 3 cities, and this makes their association with SBI even more interesting. With SBI’s huge, expanded network of branches and connectivity, this partnership can open new avenues of growth within the ecommerce industry.
Similarly, MoU with Paypal also holds significance as SBI had launched their own payment gateway last year: SBIePay, which was meant to assist merchants, traders and Govt. departments to facilitate online payments. With digital payments growing at a breakneck speed right now (Rs 50,000 crore mark was breached in 2012), SBI and Paypal’s association can give totally new dimension to this niche.
SBI has been building their brand online for some time now, as they tripled their social media presence last year, thereby indicating that they are now ready for the new market conditions. With their leap into the ecommerce industry, it is further evidence that it is the adaptability and flexibility which has enabled SBI to exist since last 96 years.
And this is their new beginning.
Updated: Partnership with Paypal
As we mentioned, SBI has also confirmed their partnership with Paypal. As per the press release sent to us, State Bank of India, country’s premier Bank and PayPal, the world’s leading open digital payments company, today entered into a strategic partnership to promote cross border trade and facilitate payments for SBI and PayPal users both in India and abroad.
The partnership will enable SBI Debit cardholders to use PayPal when buying products from overseas websites and allow SBI’s Micro Small and Medium Enterprise (MSME) customers to gain access to PayPal’s secure payment solutions. We would also collaborate on providing innovative financial solutions to the merchants who are using PayPal services.
The announcement reiterates the importance of India as a strategic market for PayPal. In addition to having a strong engineering workforce based out of India, PayPal also has a very robust and growing cross border business in the country. The partnership will help PayPal work closely with SBI to make it easy for Indian exporters and consumers gain access to a global audience. One of the key aspects of the partnership is the impetus that will be provided to eGovernance projects of the Government of India.
Shri B. Sriram, Managing Director, SBI said “SBI has been bringing value to its customers by providing them innovative financial solutions. SBI is very pleased to have this tie-up as it provides a perfect opportunity to both of us to collaborate and offer a wide gamut of customized financial solutions to merchants across the board. This would bring new opportunities for our SME customer base.”
Speaking at the event, Vikram Narayan, Managing Director and Country Manager (India), PayPal said, “It is an honour for PayPal to partner with the State Bank of India (SBI) which is India’s largest bank. We foresee exciting times ahead as the economy is poised to pick up and support Indian citizens and, businesses to evolve through global transactions. We understand the Government’s focus on the MSME an