It is raining digital wallets in India. There was a time when there were none and then the RBI mandate arrived. Ever since the number of digital wallets has seen a rapid growth. PayTM, Freecharge, MobiKwik, Oxigen to name a few. Then came in Ola with Ola Money for its own taxi hailing app. Just a couple of weeks ago the news came in that Uber too is working on its own digital wallet. Now, Flipkart is here with Flipkart Money to take on all of the above.
Flipkart Money comes 6 months after the company acquired FXMart for about Rs 48.5cr.
FXMart had a prepaid wallet license till 2019. As per a report on LiveMint, Flipkart originally planned to launch Flipkart Money right after the acquisition and before the big billion day sale. The plan couldn’t materialize as RBI was seeking further details about the acquisition. There has been further delay ever since due to technology and product issues.
Now that Flipkart Money has been launched it will be interesting to see how Flipkart uses it. It will certainly help in reducing the dependency on Cash On Delivery as over a period of time Indian users have started trusting these mobile wallets. Also, it is not clear if it will integrate Flipkart Money on other platforms for payments. The wallet will have a ceiling amount of Rs. 10,000 that can be held in it. Also, a top of up to Rs. 25,000 is allowed every month.
Flipkart Money is currently live on Flipkart’s app on Android and the update should follow on iOS soon. The possibility that Flipkart will now move towards providing cashback that consumer will get in their wallet rather than provide hefty discounts. What that does is keep the consumer hooked to the e-commerce platform. This will be a strategy similar to what PayTM follows who also happens to be the leader in digital wallet game. Also, in terms of returns that happen, the money might also be reverted to the wallet itself. This again keeps the money in a zone where people will probably utilize it to buy something on their platform.
Interesting days ahead especially in the digital wallet space. Given that Flipkart’s valuation was just cut down by Morgan Stanley, they would be hoping the digital wallet will give some boost to their overall ‘unicorn’ stature.