India’s Flipkart got a shiny Online Wallet: What’s in it for me?
India’s eCommerce site Flipkart has started Online Wallet as one of the payment options. Flipkart already has enabled all popular payment options including the most popular cash on delivery option.
With Flipkart Online Wallet you fill up your Flipkart wallet with money from either your bank or credit card. A top limit of Rs.10,000 (US$193) is set and once the wallet is full you can make all the purchases you want without the hassle of entering credit or debit card details for every purchase. This will potentially reduce the payment gateway hassles, but by only so much. You can get your money back anytime you want.
There has been a huge cry over payment gateways of late. Startups who rely on payment gateways are finding it hard to get a decent gateway and the gateways are taking them for a ride. What Flipkart’s wallet would do is reduce the dependence on the payment gateways. Now there is still a dependency on the payment gateway for that one time deduction of the wallet amount. But if you (read Flipkart) were depending on the payment gateway for 10 times before, now you might get it down to just one or two times in a span of six months.
What about me, Flipkart?
I can see the potential but I don’t see the usage. Let’s talk numbers. As per Flipkart, 65% of their purchases are cash on delivery. Which leaves us with a mere 35% of the purchasers who, I assume, are using some kind of payment gateway. Many of them would be one-time buyers fueling their impulse purchases and few of them will be long time customers.
Flipkart wallet is obviously catering to the long time customers and possibly luring one time buyers with the promise of a great experience. But there’s one more thing, Flipkart seems to be missing.
Why would I let Rs. 10000 lie in Flipkart’s bank account? Money makes money and if I had it in the bank, I would earn a nominal interest. If I am lousy and use a credit card, I will be losing out on the Interest if I don’t pay my dues. Any which way I am either losing some money or losing out an opportunity to gain some money.
And Flipkart if it is not keeping this money in some sort of escrow account, would be earning interest out of it. Shouldn’t Flipkart be passing on the benefits to its Wallet customers in some sort of discount?
Unless it does, I doubt anyone will opt for it. I wouldn’t.
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