Flipkart is shifting its gears to ramp up its operations for its payments business. The online retailer is planning to invest around Rs 670 crore to build digital payment business over the next three years. The move can be considered as company’s strategy to tackle the hassle of its cash transactions and also to expand its business to growing market for online payments.
The Bengaluru-based company will launch a new product, which will work like a digital wallet while also allowing consumers to pay online without using either a card or a netbanking service, as it will be built on the government-approved technology platform — Unified Payments Interface.
The company will be seeking assistance of PhonePe (the payments startup which was acquired by Flipkart) to build its platform. The company is expecting the product to be ready within coming weeks for the trial. Binny Bansal, CEO, Flipkart feels that the payments business will take the company’s business to a new horizon and will also help the firm to expand its reach. This is a long-term strategic bet for us, and we believe PhonePe could become as big as Flipkart one day, said CEO.
Elaborating further on the subject, Sameer Nigam, Founder, PhonePe said that designed as an omni-channel product, PhonePe will be a container for multiple payment solutions which includes a semi-closed loop wallet and have a tie up with a large bank for UPI.
However, market is still cynical about the company’s move as its competitors Snapdeal and Amazon have already ventured into this segment by acquiring Freecharge and Emvantage respectively. On top of that, Paytm is dominating this segment and it requires an astonishing effort to give the payment solution firm a tough run in this sector.