Digital payments boom again


After a brief lull during the height of the second wave in April and May, digital payments were up across the board in June, led by UPI, which clocked a record number — and value — of transactions.

Also in this letter:

🛒 Flipkart bets on social commerce, again
💸 Zomato seeks nod for Grofers deal
👨‍💻 MSwipe gets a new CEO

UPI clocks record 2.8 billion transactions in June

Record Break

GIF Credit: Giphy

Unified Payments Interface (UPI) bounced back to record levels in June after taking a hit for the past two months.

Driving the news: The platform processed 2.8 billion transactions worth Rs 5,47,373 crore in June, up from 2.53 billion transactions worth Rs 4,90,638 crore in May, according to data released by the National Payments Corporation of India on Thursday.

  • UPI’s previous high was 2.73 billion transactions worth Rs 5,04,886.44 crore in March 2021.

Between the lines: The significant growth in UPI numbers points not only to the increased adoption of digital payments but also a revival in business activity following lockdowns in May.

UPI sets new records in June

Digital payments are up across the board: NPCI’s other digital payments channels including Bharat Bill Payment System (BBPS), National Electronic Toll Collection (NETC), Aadhaar Enabled Payment System (AePS) and Immediate Payment Service (IMPS) also saw an increase in the volume (number) of transactions processed in June.

BBPS saw its volume grow to 45.47 million transactions from 39.22 million in May.
IMPS volumes rose to 303.7 million transactions from 279.8 million.
AePS volumes grew to 87.5 million transactions from 84.2 million.
NETC Fastag saw even sharper growth to 157 million transactions from 116 million in May, due to an increase in road traffic.

Last week, we reported that payments made through debit and credit cards also recorded 12.7% and 18.6% growth respectively for the first three weeks of the month, according to Reserve Bank of India data.

NEFT, which is predominantly used for wage payments by businesses and other interbank settlements – saw volumes grow by 10.9% during the period.
RTGS, which is used for big-ticket payments between banks and corporates, also registered a healthy 21.4% growth.

Flipkart bets on social commerce with Shopsy


Social commerce is being billed as the next growth driver for the e-commerce sector, and Flipkart is seeking a piece of the pie with the launch of Shopsy.

Tell me more: Shopsy will allow individuals and small businesses to become resellers of goods in their networks through platforms such as WhatsApp. While the platform will be free for these ‘micro-entrepreneurs’, merchants selling on Shopsy will pay a standard marketplace fee, said Prakash Sikaria, SVP (growth and monetisation) at Flipkart.

The platform will offer around 15 crore products across categories such as fashion, beauty, mobiles and home. Flipkart will act as a conduit between the seller and the reseller.

What’s next? Eventually, Flipkart aims to help resellers set up their own Shopify-like digital storefronts. The Walmart-owned firm aims to enable over 25 million online entrepreneurs through Shopsy by 2023.

Competition: The move comes at a time when social commerce platforms like Meesho are looking to diversify its business to target 100 million small businesses. Meesho recently raised $300 million financing in a round led by SoftBank, which is also in talks to invest in Flipkart.

India’s proposed e-commerce rules: The launch comes amid regulatory uncertainty due to the government’s proposed changes to the e-commerce rules. If cleared, they would have major ramifications not only for e-commerce marketplaces such as Flipkart and Amazon but also a range of online companies such as travel company MakeMyTrip, food delivery firms Zomato and Swiggy, ride-hailing firms Ola and Uber, and home services provider Urban Company.Meanwhile, Amazon filed a petition in the US on Wednesday, asking for the recently appointed Federal Trade Commission (FTC) Chair Lina Khan to be recused on antitrust matters related to the company, due to her extensive criticism of the e-commerce giant over the past few years.

Khan rose to prominence following a 2017 paper titled Amazon’s Antitrust Paradox, which argued that the country’s existing antitrust law framework was not enough to prevent anti-competitive behaviour from e-commerce platforms such as Amazon. She also played a key role in formulating the US House Judiciary antitrust subcommittee’s report on Big Tech last year.

This petition comes as FTC is reviewing the online retail giant’s proposed $8.45 billion purchase of US movie studio MGM.

Tweet of the day

Zomato seeks CCI nod to buy stake in Grofers

Zomato Grofers

IPO-bound Zomato has sought permission from India’s competition watchdog to acquire a 9.3% stake in online grocery Grofers.

The deal: Earlier this week, we reported that Grofers has signed a deal with Zomato and Tiger Global to raise $120 million at a valuation of just over $1 billion. New York-based investment firm Tiger Global is an investor in both companies.

  • Zomato is expected to invest around $100 million in Grofers while Tiger Global will put in the rest.

Hyper-competitive market: The Tata Group acquired a majority stake in BigBasket and invested another $200 million in primary capital in the company. Amazon and Flipkart are also ramping up their grocery plays as consumers increasingly migrate online to buy essentials.

  • Zomato’s rival Swiggy has also entered the online grocery segment with businesses such as Supr Daily and Instamart.

MSwipe appoints new CEO amid pivot

Ketan Patel

Merchant payments fintech Mswipe has appointed former Cashe CEO Ketan Patel as its new chief executive, with founder and former CEO Manish Patel elevated to managing director.

Why the change? The leadership rejig at Mswipe comes as the startup aims to pivot from a merchant-focused payments firm to a “digital SME bank”. It plans to apply for a non-banking financial company (NBFC) licence in FY22 and attempt to turn itself into a small finance bank (SFB).

As managing director, Manish Patel is expected to focus on payments and product innovation, while Ketan Patel is set to manage digital banking and the day-to-day operations.

  • Last month, rival BharatPe became the first fintech in India to secure a small finance bank (SFB) license in partnership with Jaspal Bindra-led Centrum Group after it received in-principle approval to take over the troubled Punjab & Maharashtra Co-operative (PMC) Bank.

What’s the plan? Patel told ET they will start pilots around cross-selling insurance (at merchant storefronts) as well as giving options for their partners to convert their kiranas into cash withdrawal (micro ATM) points. The company also plans to launch a buy-now-pay-later product.

Yes, but: A digital bank in India is more of an intermediary that allows merchants and consumers to avail banking products such as loans, deposit services and cash withdrawals in tie-ups with licensed banks. Mswipe is expected to follow a B2B2C model in which it will help merchants cross-sell financial products to their customers.

Uber wins big in Didi’s IPO

Britian Uber

Five years ago, Uber sold its China business to rival Didi after spending billions of dollars in a price war with the company. As part of this sale, Uber picked up an 18.8% stake in the Chinese ride-hailing giant. This transaction is now bearing fruit for the largest mobility company in the world.

What’s the news? Didi raised $4.4 billion in its US initial public offering (IPO) earlier this week. The company’s shares spiked as much as 28.6% on its trading debut before closing at a modest 1% increase, giving it a market cap of $68 billion.

While Uber sold some of its shares in Didi in the run-up to the IPO, the company’s current 12% holding is now worth about $8.1 billion.

On the flip side, Didi’s largest shareholder SoftBank saw more modest returns. The Japanese tech conglomerate has pumped around $12 billion into the company and its 21.5% stake is now worth $13.7 billion, as per The Information.

It noted that SoftBank’s $7.7 billion investment in Uber in 2018 has appreciated by 45% in the past three years.

Today’s ETtech Top 5 was written by Vikas SN in Bengaluru and edited by Zaheer Merchant in Mumbai.

Source link

Free Course

"Double Your Traffic in 30 days" + Secret Bonus

valued at $299

This amazing course will teach you, step by step, how to double if not triple your traffic over the next 30 days.

100% Privacy. We will never spam you!