BENGALURU:Large online sellers who have affiliations or investments from e-tailers like Amazon and Flipkart are paying only about 5-11% of their revenue as marketplace fee, while regular third-party sellers typically pay at least 15% as platform fee.
The latest balance sheets of major online sellers like Cloudtail, Appario Retail, and Tech-Connect Retail show the amount they pay as platform fee to online marketplaces. Cloudtail paid Rs 315 crore as platform fee to Amazon on a revenue of Rs 7,149 crore in FY2018. That’s 4.4%. It’s about 11% for Tech-Connect Retail, which owns one of the largest sellers on Flipkart, RetailNet. These entities drive large volumes of sale for companies like Amazon and Flipkart.
Rahul Chari, chief technology officer and co-founder of digital payments company PhonePe.
By Pranav Mukul
New Delhi:Even as some of the big banks in the country adopt the financial technology (fintech) approach, companies and start-ups offering digital payments services will continue to be on the top of developing products for the end consumer. RAHUL CHARI, chief technology officer and co-founder of Flipkart-owned digital payments company PhonePe tells PRANAV MUKUL in an interview that while banks will continue to be the gatekeepers of funds, there is an opportunity for fintech companies and the banks to jointly bring new products to market. He also talks about the opportunities PhonePe plans to leverage from Walmart’s investment in Flipkart. Edited excerpts:
With banks building digital payment products, where do you see growth coming from for fintech players?
For us, the definition of fintech from day one has basically been that we bring in the tech — meaning not just the systems and the platform but also the consumer DNA and the thought process of how to build products for the consumer — and the financial institutions actually bring in the ‘fin’ in fintech. So we have a partnership approach. That’s why even today, we call ourselves a payments container and not a wallet. As a payments container, we support every financial instrument of the consumer’s choice and, therefore, you also see third-party wallets there like Freecharge, Jio and Airtel Money. You’ll see more wallets in the future. Debit cards and credit cards are directly being used and we don’t force the user to top up the wallet and we are big on UPI which was introduced by NPCI along with the banks. That’s how I think it will continue to evolve. Banks will continue to play the role of being the gatekeeper of the funds. Banking is an age-old industry and the knowledge of processes involved in keeping money, storing money and making money grow is with them. For us, there is an opportunity to build partnerships and products and jointly take these products to market.
