Flipkart has acquired a majority stake in payment services startup, FX Mart for a deal amount of Rs 45.4 crore, to offer a digital wallet on its app and avoid paying a cut to external wallet providers. As part of the deal, two senior Flipkart executives have joined the board of FX Mart, as per the Registrar of Companies filings.
This is Flipkart’s second stake acquisition in digital payments. Previously, it had made a strategic investment in Helion Venture backed mobile payment startup Ngpay, a payment service and a marketplace that introduced mobile payments in India. Also, in 2014, the company had shut down its payment gateway business Payzippy, as it failed to perform according to the company’s expectations.
Started by Amit Narang, FX Mart deals in Digital/Electronic Payments; Remittances; buying and selling of currencies, overseas remittances, travel and related services. It owns a coveted prepaid license issued by Reserve Bank of India.
Flipkart is not planning to use the payment service on its own platform, but it will offer this service on third-party sites and apps later. Indian payment services market is heating up in India with players like Paytm, MobiKwik, Oxygen, Citrus, and PaYU among others. RBI had also approved 11 applicants for payment banks, which included Alibaba-backed Paytm, which is planning to establish a new entity named PayTM Payment Bank Ltd. for the payment services. Cab hailing service, Ola had also started its own wallet service named Ola Money for auto rickshaws, enabling its users to make payments online.
Snapdeal is also working on a payment product of its own which it plans to launch by the end of this year. Fx Mart too, had applied for a payment bank license, but didn’t get it in the first lot of licences issued by RBI.