Flipkart strengthens mobile payments service by investing in Ngpay

With online marketplace Flipkart focusing more on mobile commerce, it has decided to strengthen its mobile payments service by investing in payment platform Ngpay. Following this, it has shut its in-house payment gateway Payzippy and merged it with Ngpay, a free mobile app that allows users to buy goods and services such as movie and air tickets through their mobile phones. According to Flipkart, mobile-commerce contributed about 50 per cent to the company’s overall sales.

A Flipkart spokesperson said that the entire team at Payzippy will move to Ngpay and that nothing changes for its consumers. Flipkart had launched Payzippy last year but phased it out last week, as it was not getting enough business for the company, sources said.

Industry experts feel that the reason behind Payzippy’s closure was Flipkart’s inability to compete with pure-play payment gateways such as Ngpay, Zaakpay, EBS, Direcpay, CCAvenue, Transecute and Billdesk among 1,000 similar start-ups in the country that focus only on providing mobile payment solutions.

“Payzippy’s payment system was catering to web-only users, while Ngpay works on mobile as well. Ngpay lets users book flight, train, and bus tickets, top-up mobile phones and satellite television subscriptions, and do online shopping through mobiles. It claims to carry out a transaction every 0.1 second. So, it makes good business sense for Flipkart to focus more on improving mobile payments for its customers,” said Venket Nallapati, founder of enterprise mobile application development company Adeptpros.

To this Ashish Jhalani, founder of consultancy firm E-tailing India said that, “Flipkart realises that Payzippy is not a core business for them and they should rather partner with someone to offer the service. That apart, it was a brand associated with Flipkart.”

The Bangalore-based company in an emailed statement said that it has already made a strategic investment in Jigrahak Mobility Solutions Pvt Ltd, the company that owns Ngpay. “Nothing changes for our customers, who will continue to enjoy all the benefits of a safe and secure payment system through Flipkart.com. Payment is core to the company and we see this partnership giving rise to the largest mobile payment brand in India," a spokesperson said.

Flipkart's founder Sachin Bansal in an earlier interview to Business line had said that the company was actively pursuing a couple of deals in this space. Other Indian e-commerce firms such as Paytm and Snapdeal are meanwhile on the prowl to acquire small technology companies, mainly in the payment platform.

As the $3.2-billion e-commerce market gets bigger, companies will work on making payments easier, comparing prices faster and creating mobile wallets. According to a report by Accel Partners, online shopping of physical goods in India will grow to $8.5 billion in 2016. The number of online shoppers in India will be more than double at 40 million, a clear indication that more consumers in India are using smart-phones to shop, do mobile banking and online payments.