Leading ecommerce company Paytm has taken a drastic step towards having its own payment system. The company is letting go of payment aggregators it had collaborations with, including Citrus, Justpay, PayU and Ezeetap. Paytm sellers who wish to transact through mobile wallet will now be able to pay using only Paytm’s service.
The intention behind this is to build a ‘trusted and captive audience’, said Kiran Vasi Reddy, senior VP at Paytm. Reddy said, “We are going to stop our wallet services for merchants via any online or offline aggregator in order to build our own trusted and captive audience. This will also improve the over-all user experience and success rates for merchants because they will be using a customized integrated system.”
Payment aggregators like PayU or Citrus simplify the transaction process for sellers by storing account details, which ensures quicker transactions. They also hold money in the sellers’ accounts. Sellers who operate on Paytm (and pay using mobile wallets) will now have to carry out the entire payment process only if they have an agreement with Paytm.
Reddy says of the merchants, “The merchants also realize that the customized solution we offer will boost their business.”
Paytm has taken a u-turn from its views in November of last year. During that time Freecharge launched its own digital wallet and unceremoniously dropped other wallets associated with the company.
Paytm’s VP – Products, Nitin Misra had strongly reacted to the move by stating, “We have better acceptability and more consumers. Why would a customer put money in a wallet that can be used only on that particular site and the cash back too cannot be used elsewhere? In my opinion, the consumer is not dumb. If somebody does not wish to allow us as a payment option on their site it is entirely their call.”
The company’s current move is a case of having to eat one’s own words.
Everybody wants to operate their own payment system. Flipkart, Snapdeal, and now Amazon are all either operating their own wallets or are in the process of doing so. This is because of the popularity of mobile as a payment option.
However, if every marketplace operates its own wallet, wouldn’t it put payment aggregators out of business?