Why Flipkart is shutting down its electronic wallet PayZippy

India’s ecommerce poster-boy Flipkart is shutting down its electronic wallet PayZippy, just over a year after it launched. “While we phase out our own payments product, PayZippy, nothing changes for our customers, who will continue to enjoy all the benefits of a safe and secure payment system through Flipkart,” a Flipkart spokesperson told Tech in Asia.

The news was first reported by Medianama. With PayZippy, ecommerce merchants can accept payments from all credit and debit cards as well as use 53 net banking options.

The PayZippy clsoure is linked to Flipkart’s recent investment into mobile payments company Ngpay (Next Generation Pay). This Bangalore-based startup lets users book flight, train, and bus tickets, top-up mobile phones and satellite television subscriptions, and do online shopping through mobiles. It claims to carry out a transaction every 0.1 second.

Now that more and more consumers in India are using their smartphones to shop, mobile banking and online payments are hotbeds for innovation. According to a Frost & Sullivan report, mobile commerce in India will record estimated revenues of US$1.26 billion with close to 72.5 million subscribers by the end of 2018. Currently, there are about 900 million wireless subscribers and 150 million mobile internet users in India.

See: India quickly ditching feature phones for cheap smartphones

Flipkart co-founders Sachin and Binny Bansal expect their marketplace to be largely an mcommerce company in a couple of years. “India is at an inflection point right now. In a couple of years, 500 million people from all over the country will get online through their mobile phones. Shopping will have to be very different then. This funding is all about making it happen,” Sachin Bansal said when announcing US$1 billion of funding in August. “Twelve months ago, just five percent of our revenue came from mobile shoppers. Now, 50 percent of our shoppers are mobile users,” he added.

So it makes good business sense for Flipkart to focus more on improving mobile payments for its customers. “Payments is core to Flipkart and we see this partnership (with Ngpay) giving rise to the largest mobile payments brand in India,” the company says in a statement today. Referencing Ngpay’s founder and CEO, it continues: “Sourabh Jain’s expertise will help us drive innovation in payments, with features and products that provide a competitive end-to-end customer experience, to redefine the payments ecosystem in India.”

While it is boom time for mobile payment enablers like Ngpay, Paytm, and Freecharge, along with opportunities arising from a take-off in smartphone and internet usage, there are new challenges such as clunky payment gateways, regulations, and even language barriers across India. Those who figure out the best way to jump these hurdles will score big in a diverse mobile-first market like India.

Many of the leading ecommerce companies in India, including travel portal Makemytrip, jewellery estore Bluestone, and baby and mom products marketplace Babyoye, use Flipkart’s Payzippy. It will be interesting to see if this clientele will now move to Ngpay.

(Top image: Wikipedia Commons)

The post Why Flipkart is shutting down its electronic wallet PayZippy appeared first on Tech in Asia.
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