by Elton Gomes
As the festive season nears, Flipkart has announced a new payment option called Cardless Credit. The development comes just days after Amazon India launched its Amazon Pay EMI credit option.
Flipkart’s new credit option offers instant credit ‘up to Rs. 60,000’, and is said to be a continuation of the companys fintech journey that began with its Pay Later feature that was launched in January 2018. Flipkart said, in a statement, that the new cashless credit system is meant to simplify access to credit in real time while simplifying credit assessment and application process, NDTV reported.
How will cardless credit benefit customers?
In its press release, Flipkart said that through its new credit feature, customers will be able to get instant credit which can then be used to make purchases on Flipkart. The feature is aimed at millions of credit-worthy yet underserved customers who are unable to avail credit facilities at traditional banks.
Flipkart further said that Cardless Credit aims to make e-commerce more inclusive and help customers with small ticket credit line while they make a purchase at Flipkart.
How will customers pay back
Flipkart said that the process to get an instant credit line up to Rs 60,000 takes only a minute. The amount of credit awarded is based on customer behaviour on the shopping portal.
Buyers will have access to two options: Pay Later next month, or EMIs of 3-12 months. Users will have the option to checkout for purchasing values less than Rs 2,000. Those who choose the Pay Later option will have to pay the due amount through their debit card or via net banking.
Flipkart to apply for NBFC license
Flipkart said it could also apply for a new NBFC (non-banking financial company) licence, to envision its broader strategy of developing a full-fledged financial services business that will aid the online retailer in growing its business.
In an interview with Live Mint, Flipkart’s senior vice-president Ravi Garikipati, who heads the fin-tech business at the company said that Flipkart will take a two-pronged approach to consumer lending. Once the company receives the NBFC licence, it plans to lend directly to consumers and through partnerships with other NBFCs and financial services firms.
Fintech gets a boost in India
After Walmart purchased a stake in Flipkart, the Indian-based online retailer is thinking of new ways to combat Amazon in the Indian market. Both Amazon and Flipkart are engaged in an intense battle to boost sales in India. Over the past years, Amazon has been aggressively investing in developing its fin-tech and payments services in India. The Jeff Bezos-led company has invested in several payments and fin-tech startups to boost its offerings. Earlier in 2018, Amazon had invested $22 million in digital lending firm Capital Float, and it also invested $12 million in digital insurance start-up Acko. As Flipkart and Amazon look to better their services in India, customers are spoilt for choice and have a large variety of products to choose from as the festive season nears.
Elton Gomes is a staff writer at Qrius