Snapdeal to launch own payment gateway

Online marketplace Snapdeal is launching its own payment gateway, the second company to do so after market leader Flipkart.

NEW DELHI :Online marketplace Snapdeal is launching its own payment gateway, the second company to do so after market leader Flipkart. The service aims to simplify online transactions for users and may also be licensed to other e-commerce companies. The gateway will authorise credit card payments and process them securely through a user's bank account, and is expected to help wean Indians away from paying by cash for purchases made online. 

"In our business, the core marketplace is the king, the logistics platform the queen, while the payments platform is the jack. We need to get this entire stack in place," said Kunal Bahl, co-founder and chief executive of Gurgaon-based Snapdeal which expects to earn revenue of over Rs 2,500 crore this fiscal. 

Apart from saving credit card information, billing and shipping details of the customer, Snapdeal's yet-to-be-named payment gateway will also incorporate analytics relating to the buyers' specific choices, allowing them to complete transactions in a few quick steps. The company has about 20,000 sellers transacting on its marketplace offering about 500 product categories. 

India's $13 billion (Rs 80,743 crore) e-commerce sector has grown on the back of the cash-on-delivery model, where buyers pay for their purchases at the time of receiving them. Almost 60 per cent of online sales in India are paid for in cash. But the additional processes required for cash-on-delivery and higher instances of returns have added to the overheads of online retailers. 

In an earlier conversation with ET, Sachin Bansal, co-founder of Flipkart pinpointed the non-immediacy of payments and higher returns as the problems they face with cash-on-delivery. "In an ideal world, I would not like to have cash transactions," he had said. 

In July, Flipkart launched its own payment gateway, PayZippy that operates as a direct solution for merchants as well as a digital wallet for consumers. At present, an estimated 10 lakh unique visitors log onto the Flipkart portal everyday. By 2015, the Bangalorebased company expects to post sales of $ 1 billion. 

Experts said as mobile commerce picks up in India the share of cash payments could come down to about a third of all online sales. Flipkart is also seeking government approval to reduce the number of steps needed for card transactions and to store card details of regular customers so they do not have to enter the information each time they shop. 

At present, with about 400 million cards, per capita credit card ownership in India is one of the lowest among emerging nations according to EY. "E-commerce in India does have payment-related issues," said Pragya Singh, vice president at retail consultancy Technopak. "This (launching their own payment gateways) will allow Snapdeal and its peers more flexibility and control," she said.

Bahl said the proposed gateway will be cross platform, allowing other e-commerce companies to plug into it. Additionally, for merchants selling on the Snapdeal marketplace, the platform will ensure that transactions do not fall through due to technical errors, a common phenomenon while transacting online in India
.

Hi guys If u like this post please leave a comment in comment box... comment box will top right of every post and bottom of every post. its useful for me give a better information.. check top of the blog there is menu bar in that go to comments i replied for u r comments because there is no direct option for reply for u r comments. if u want to give any suggestion in bottom of blog there is contact information option please leave a msgs with u r mail id sure i will get u.