Amidst the sea of digital wallets comes another online wallet for your purchases. Taking a leap towards digital payment business, Flipkart has unveiled its own wallet, dubbed ‘Flipkart Money‘.
As goes with any digital wallet of a company, the costs associated with transactions, payment gateways and returns and refunds get reduced, making the P&L statement look better on paper. It also allows Flipkart to take over other similar services in the market and make a strong foothold in payments industry.
According to Binny Bansal, Co-Founder – Flipkart, payments is one of the four pillars of Flipkart, apart from Logistics, e-commerce and advertising.
Why the need to have a separate wallet after 9 years of inception?
You must be wondering why Flipkart is launching a digital wallet now, when there is no need of one to be honest and Flipkart has been working very well for the last 9 years. However, not many know that this is because of a business deal made last year in 2015.
Flipkart acquired major stakes in FX Mart for Rs 45.4 Crores, which owns a coveted prepaid license issued by Reserve Bank of India(RBI) to make a payment service on its platform. This will allow Flipkart to develop a wallet of its own and reduce the turnaround times for refunds and returns.
Flipkart thinks this will reduce the cost of paying to external wallet companies like Paytm and Freecharge and also allow Flipkart to directly make refunds to its own wallet, instead of refunding to cards or bank accounts.
Details of Flipkart Money
The wallet is live on Flipkart’s smartphone app and can be accessed to make payments on its own marketplace. Users can hold a balance of Rs 10,000, with a monthly top-up limit of Rs 25,000. Top-ups can be done using credit cards, debit cards or through net banking.
The digital wallet is right now Flipkart-only, so you won’t be able to use it for any other service, which is a bummer considering other services like Ola Money and Paytm allow transactions at multiple merchants.
Other services Flipkart can make use of its wallet are allowing higher discounts and cashbacks on the products listed on their website. This will attract more customers and also allow Flipkart to keep the money within themselves and the customer, forcing the customer to spend it on Flipkart only.
Let’s see how this strategy works out. The digital wallet could also come to Myntra successively for payments. We hope this does not fail like Flipkart’s app-only strategy, and customers can reap benefits from the same.
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I think more options to consumers will surely boost competition, at the same time one after another back to back online payment wallets from such websites may change the face of online transaction in India. It’s better late then never.