Snapdeal, an online marketplace for vendors and retailers, is going to launch its own payment gateway to simplify online transactions for its users and reduce the number of cash-on-delivery transactions, according to reports.
The gateway is yet to be named, but its functionalities will include authorising credit card payments and processing them securely through the user’s bank account, saving credit card information, billing and shipping details of the customer along with incorporated analytics regarding the buyers’ preferences in order to complete transactions quickly. The gateway can also be licensed to other e-commerce companies.
The Indian eCommerce market has seen exponential growth in the past few years, and it is expected to grow to USD 34 Bn by 2015. However, one of the major factors that has contributed to this growth is cash-on-delivery transactions, with over 60% online shoppers preferring to pay in cash for their purchase according to a study by Internet and Mobile Association of India and audit firm KPMG. While this is seen as a convenient option by customers, it results in extra additional costs and higher instances of returns for online retailers. Offering quick and easy online payment methods is a way of reducing cash in eCommerce. The rise of mCommerce will also contribute to lowering the share of cash payments.
“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 Officer, Snapdeal.com.
Earlier this year, Flipkart had also launched its own payment gateway PayZippy that operates both as a payment gateway that can be used by merchants, as well as a digital wallet for the customers.
In April this year, Snapdeal had also launched TrustPay, a service that assured 100% cashback to the customer in case the company fails to deliver on its commitments. The payment made by the customer, whether online or through cash on delivery, is only released to the seller after the customer has confirmed receiving the product in a satisfactory condition, or if the company does not hear from the customer within seven days of product delivery. This service has generated a lot of interest and good will among the online shoppers, which is why we feel it is perfectly positioned to be used as a brand name for the new payment gateway by the company.
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