Flipkart’s pay later not affected by new RBI guidelines: Dheeraj Aneja, SVP & Head – Fintech
Flipkart’s Pay later did not route its pay later credit on a prepaid payment instrument (PPI) or digital wallet and hence the company is not adversely affected by the new RBI guidelines, Dheeraj Aneja, SVP & Head – Fintech and Payments Group, told Flipkart Business line.
Flipkart’s pay later offer is in collaboration with IDFC bank, where the e-commerce company facilitates the introduction of the customer on the product and then credit is paid out directly by IDFC bank and used by customers on the platform. However, Aneja noted that Flipkart is evaluating the circular internally and is looking for greater clarity like the rest of the industry.
The company said it continues to see steady growth on its payroll offering that launched nearly two years ago and has reported a user base of 6 million by May 2022.
Commenting on whether Flipkart Pay Later has helped increase the average order value of customers on Flipkart, Aneja said, “With credit, we are able to increase the overall affordability of the product and so in some cases we find that people are able to actually use credit to buy things that are more aspirational in a very affordable and seamless way.”
“We are seeing very healthy adoption of digital payments across the board, which includes BNPL (Buy Now Pay Later). Our 30-day pay later product is finding greater use in small ticket purchases such as books, lifestyle – where it is a convenient way to buy the product on and pay While we are seeing greater adoption of EMI in categories like mobile and electronics, he added.
Flipkart has created its pay later offering instead of integrating with existing pay later companies like Lazypay, Simpl etc. Regarding the thinking behind this, Aneja said that Flipkart’s pay later product is available on Flipkart and Myntra which covers most the product categories that a customer wants to buy. The company later plans to expand its pay later product to also include the Cleartrip group company.
“So if you look at it from a customer point of view, these three businesses alone can cover a large part of a customer’s wallet. You can buy books, groceries, phones, appliances, travel and fashion,” he added.
In addition to consumer finance offerings like Flipkart Pay lets and EMI, the company’s fintech arm is working to build a scalable and robust digital payment infrastructure to support the platform where it partners with banks and payment gateways to offer various payment options.
Second, the fintech arm is handling Flipkart’s co-branded credit card business in partnership with Axis. Thirdly, the business is for value added services which include Mobile Protection Plan, screen damage and cyber insurance etc. Fourthly, the company offers seller financing where it works with various banks and NBFCs to ensure that Flipkart sellers have access to growth capital and working capital.
Talking about the benefit of having a separate fintech arm, Aneja said, “having an independent FinTech arm allows you to access the larger ecosystem of financial services, partnering with banks, networks and NBFCs. It is a lot of innovation, given the size and scale of the platform that we can try, both in commerce and financial services.”
Published on
21 July 2022
