Flipkart is reported to have acquired majority stake in FXMart, the mobile wallet service provider. The acquisition is said to enable the company to run its own payment service for both Flipkart and Myntra.
The deal is said to have cost Flipkart a neat Rs. 45.4 crores. Two senior Flipkart executives are also said to have joined FXMart. Flipkart is planning to launch a payment facility for its mobile apps shortly. Buying a stake in FXMart seems to be a step in this direction.
FXMart owner of RBI licenses
FXMart has an RBI license for semi closed prepaid instruments (acquired in August 2014), and an RBI Full Fledged Money Charging license (acquired in May 2013). These licenses make the acquisition a sweet deal for Flipkart. FXMart has also applied for a Payment Bank License with RBI. The company is also working out an arrangement with the National Payment Corporation of India (NPCA) to launch an instant domestic money transfer program in India.
All this means that Flipkart can now generate its own mobile wallet, and save on the cut it currently gives to third party service providers.
RBI recently issued guidelines for licenses for payment banks. The licenses were for non-bank corporates including mobile companies. Approved payment banks could accept deposits, remit service through multiple channels, and issue debit cards. There was a scramble to acquire the license.
Attempts at bringing down COD instances by popularising mobile wallets
By giving buyers the option to use Flipkart’s own mobile wallet, the ecommerce major is doing its best to bring down cash on delivery purchases.
Mobile wallets are slowly picking up pace among Indian shoppers. The ease of use and monetary benefits are making mobile wallets an increasingly popular choice for shoppers. Ecommerce companies are also realising the clout of mobile wallets, which have incidentally crossed credit cards in usage. Online shopping is more attractive through mobile wallets, with instances of offers, paybacks, and other facilities going up.
The latest move clearly shows that ecommerce companies are taking measured steps towards minimising their COD transactions, and it appears as though mobile wallets is the way to go.