One of e-commerce’s bigger challenges is reaching a product to a customer in a far-flung area, especially if it is ‘cash on delivery’, for, if the receiver is not there, the cost of delivery goes up. On the other hand, ignore remote areas, and you lose a market.

 

Smart Payments Solutions, which runs the e-wallet service under the brand ‘Payworld’, has launched ‘assisted e-commerce’ — essentially, an aggregator in small towns or villages, typically a customer touchpoint such as a kirana store, that will place orders on behalf of the buyers.

 

Praveen Dhabhai, Chief Operating Officer, Payworld, explains it thus: a villager wants, say, a mobile phone. He walks into the kirana shop which he is familiar with and tells the shopkeeper he wants a phone. The shopkeeper places an order on one of the eCommerce sites using his e-wallet. A few days later, the product is delivered to the shop and the shopkeeper sends word to the customer to come and pick it up.

 

It is easier, cheaper and safer for an eCommerce service provider to deal with an aggregator, notes Dhabhai.

 

‘Assisted e-commerce’ has been piloted for mobile phones in a town near Coimbatore and for solar lamps in Uttar Pradesh, he said. Over time, there will be more ‘assisted eCommerce’ centres and more products to buy there.

 

Smart Payment Solutions has 60,000 active retail outlets where Payworld digital wallets can be topped up by paying cash. This would be expanded to 300,000 over the next three years, Dhabhai said. The wallet can be used on more than 15,000 websites.

 

The retail outlets that lie in far-flung areas could serve as assisted e-commerce centres.

 

Payment bank

 

Promoted by the Chennai-based Sugal and Damani group, Smart Payment Solutions operates under a ‘pre-paid instrument’ licence from the RBI. The company has applied for a payment bank licence. (Some 40 entities have applied for payment bank licence.)

 

Dhabhai said a payment bank would be profitable business. He cited ‘four revenue streams’ to say why. First, there would be a spread between the interest the bank pays its depositors and the interest it earns from putting the deposits — as mandated — into Government securities. Second, the bank would earn fees from remittance services — a customer could pay money at the bank and have it transferred to a relative in another place. Third, income from selling third-party financial products — insurance, bonds, etc. And finally, there would be income from foreign inward remittance services — a person working abroad could have money transferred to his family back home through the payment bank.

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