Flipkart’s Pay later was not routing its pay later credit on a prepaid payment instrument (PPI) or digital wallet, and so the company is not adversely affected by the new RBI guidelines, Dheeraj Aneja, SVP & Head – Fintech and Payments Group, Flipkart told BusinessLine.

Flipkart’s pay later offering is in partnership with IDFC bank, wherein the ecommerce company facilitates the onboarding of the customer on the product and then credit is directly disbursed by IDFC bank and availed by customers onto the platform. However, Aneja noted that Flipkart is evaluating the circular internally and looking for greater clarity like the rest of the industry.

The company said it continues to see steady growth on its pay later offering which was launched almost two years back and has reported a user base of 6 million in May 2022.

Commenting on whether Flipkart Pay Later has helped in increasing the average order value of the customers on Flipkart, Aneja said, “With credit, we are able to increase the overall affordability of the product and so in some cases, we do find that people are able to actually use credit to buy things that are more aspirational in nature in a very affordable and seamless way.”.

“We are seeing a very healthy adoption of digital payments across the board which include BNPL (Buy Now Pay Later). Our 30 day pay later product finds greater adoption in small ticket purchases like books, lifestyle — where it is a convenient way to buy the product and checkout. Whereas we see greater adoption of EMIs in categories such as mobile, and electronics,” he added.

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Flipkart has created its pay later offering instead of integrating with existing pay later companies such as Lazypay, Simpl etc. Talking about the thinking behind this, Aneja said that Flipkart’s pay later product is available on Flipkart and Myntra covering most of the product categories that a customer might want to buy. The company plans later to extend its pay later product to its group company Cleartrip as well. 

“So if you look at it from a customer point of view, these three businesses in itself can cover a large part of a customer’s wallet. You can buy books, groceries, phones, appliances, travel, and fashion,” he added.

In addition, to consumer finance offerings like Flipkart pay later and EMIs, the company’s fintech arm works on building a scalable and robust digital payments infrastructure to support the platform wherein it partners with banks and  payment gateways to provide various payment options. 

Secondly, the fintech arm looks after  Flipkart’s co-branded credit card business in partnership with Axis. Third is value-added services business which includes Mobile Protection Plan, screen damage and cyber insurance etc. Fourth, the company offers seller finance where it works alongside various banks and NBFCs to ensure that Flipkart sellers have access to growth capital and working capital.

Talking about the benefit of having a separate fintech arm, Aneja said, “having an independent FinTech arm allows you to access the larger ecosystem of financial services, in partnership with banks, networks and NBFCs. There’s a lot of innovation, given the size and scale of the platform that we can try, both within commerce and financial services.”

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