Govt wants ‘origin of products’ displayed, calls e-commerce firms for meet

This follows the Government e-Marketplace (GeM) platform making it mandatory for its listed sellers to specify the country of origin while registering all new products on the portal

The Department for Promotion of Industry and Internal Trade (DPIIT) has called e-commerce majors, including Amazon, Flipkart, Snapdeal and Paytm, for a meeting on Wednesday to discuss the ‘displaying origin of the product’ on these platforms, as anti-China sentiment picks up in the country. This follows the Government e-Marketplace (GeM) platform making it mandatory for its listed sellers to specify the country of origin while registering all new products on the portal.

The border stand-off between India and China has sparked a campaign here that is gaining momentum to boycott Chinese products.The meeting is being organised on a video conferencing platform, according to people in the know. Ministry officials said that this issue has come up earlier and implementation issues for e-marketplaces would be discussed at the meeting on Wednesday. Among other invitees to the discussion are Pepperfry and The E-commerce Council of India.

E-commerce executives said asking sellers to fill up information about ‘country of origin’ for new listings of products is not complicated. However, the challenge is that the millions of existing products already listed on the e-commerce platforms don’t have those details and it would be a very “time consuming” process for the sellers to mark the country of origin for those products. However, for some products, this information is already available…Read More

Paytm raises a billion dollars at a valuation of $16 bn, plans expansion

Ant Financial and SoftBank back it with full force; money will go for expansion in small cities, towns

In a mega funding round, Paytm, the country’s top financial technology entity, has raised a billion dollars (Rs 7,200 crore), at a valuation of $16 billion, from existing shareholders Ant Financial, Softbank Vision Fund and also new investors, including funds and accounts advised by T Rowe Price Associates, among others.

Discovery Capital, an existing shareholder, also participated in the round. Paytm plans to invest Rs 10,000 crore over the next three years, with the stated aim of expanding its services in tier-III cities and smaller towns.

With this funding round, the Vijay Shekhar Sharma-led fintech giant has become a top-tier Asian digital firm, much ahead of others. In this round, the company made a $1-billion equity closure, where SoftBank Vision Fund (SVF) invested $200 million, Jack Ma’s Ant Financial added $400 million and the balance amount came from T Rowe Price and Discovery, among others.

This has happened in a climate where investors are not making big bets on companies and SoftBank is still reeling from the WeWork Initial Public Offer debacle. Till now, Paytm has raised a little over $2.5 billion in investments. Proceeds from the latest round would be directed towards further expanding it’s payment and financial services business….

YES Bank’s co-founder Rana Kapoor likely to sell his stake to Paytm

According to reports, Kapoor has held preliminary talks with Vijay Shekhar Sharma, founder of One97 Communications

Rana Kapoor, co-founder of YES Bank, is said to be in talks with One97 Communications, owner of Paytm, to sell his stake in the private sector lender. Kapoor and his associate entities owned 10.6 per cent in the bank at the end of June 2019. Around 7.34 per cent of the Kapoor family stake has been pledged with Reliance Nippon Asset Management Company (RNAMC).

According to reports, Kapoor has held preliminary talks with Vijay Shekhar Sharma, founder of One97 Communications. The structure of the deal would depend on the approval from the Reserve Bank of India (RBI), given that Sharma already owns a stake in Paytm Payments Bank, said sources.

Kapoor refused to comment on the development, while Paytm did not respond to Business Standard’s queries. YES Bank said it was a matter related to the promoters. An RNAMC spokesperson said, “Reliance Nippon Life Asset Management has not given any consent and is not in discussion with anyone about YES Bank’s pledged shares.”

YES Bank had been under the regulator’s scanner for its corporate governance practices and the under-reporting of bad loans numbers. Kapoor was denied an extension to continue as MD and CEO by the RBI in November 2018.

Flipkart set for financial services foray; to lend to consumers and sellers

E-commerce firm in process of getting NBFC licence, to lend to consumers and sellers initially

In a move that could disrupt the consumer lending segment, e-commerce giant Flipkart is set to enter the financial services space, offering credit and insurance products to consumers and sellers on its platform.

The Bengaluru-headquartered firm has begun the process of applying for a non-banking financial company (NBFC) licence, which will allow it to open lines of credit to its 100 million-odd customers and over 100,000 sellers. In time, the company will offer these services beyond its platform, taking on firms like Paytm and Bajaj Finserv.

It is also partnering insurance companies to co-create micro-insurance products that will align with a customer’s e-commerce journey, according to the company. “Our vision for fintech at Flipkart is to create highly differentiated financial solutions for our customers, both consumers and sellers, leveraging data and technology to make it very inclusive, simple and transparent,” said Ravi Garikipati, senior vice-president and head of financial services at Flipkart. “A strong understanding of customers helps us arrive at credit-risk profiles very differently and will play a big role in underwriting.”

Currently, over 60 per cent of the consumers shopping on Flipkart do not have any access to formal credit. This deters them from making large purchases on the platform, which, the company says, hinders its growth. While Flipkart has for some time partnered banks and NBFCs to offer customers EMIs on making big purchases, it says a gap still exists.

On the seller front, Flipkart scrapped its lending programme after it witnessed gaps in the speed at which credit could be delivered to them. Garikipati says the new products will reduce the time taken for sellers to access credit from a few days to a few minutes or even seconds. The company is also looking at lending to sellers from its own balance sheet.

“Be it consumer lending or seller lending, we have a hybrid strategy. We are planning to apply for an NBFC licence on our own and when we have that in place, we would like to drive most of the loans using our own balance sheet. It is not exactly a marketplace, but a curated set of partners who will work with us,” added Garikipati, who in his previous stint served as the CTO and head of engineering at Flipkart.

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Flipkart will become Walmart today: Is that really good news for India?

The sale of Flipkart is not just the sale of one company. It is the beginning of a new tomorrow. It is just that one cannot be sure whether that tomorrow will be better for India than today

When Carl Douglas McMillon, president and chief executive officer of Walmart Inc, arrives at the Embassy Tech Village headquarters of Flipkart in Bengaluru later on Wednesday to acquire India’s first-to-a-billion-dollars-startup, he will be accompanied by Walmart International’s Judith McKenna and CEO (commerce) Marc Lore. It will be a triumphal return to India for the Bentonville, Arkansas-based retailer which will be partnering Google’s parent Alphabet Inc in a deal estimated at $18-20 billion enterprise value – Walmart will own about 60 per cent stake, and Alphabet will get to own about 15 per cent of the online market place.

The passage of the past five years has obviously dulled memories. All recent media reports seem to have conveniently glossed over the history of Walmart’s previous foray into India, in partnership with Sunil Mittal’s Bharti group. Walmart in 2012 launched a global review of corruption after a New York Times report on bribery at the company’s Mexico operations. The review by its lawyers flagged India among the countries with the highest corruption risk. The US Foreign Corrupt Practices Act forbids American firms from paying bribes. Almost on cue, in November that year, Bharti Walmart suspended a number of employees, including the chief financial officer, as part of an internal investigation into bribery allegations in the Indian operation. By June 2013, Raj Jain, the CEO of the India operations, quit after six years at the helm of the company. It did not take much time thereafter for the Walmart-Bharti JV to fall apart.

One hopes that this time around Walmart has done enough due diligence before committing to the deal. One hopes that someone has told Carl Douglas McMillon (Doug to friends) that when Flipkart-owned Myntra acquired fashion e-tailer Jabong from the troubled Rocket Internet, Jabong was facing a huge number of corporate governance issues. Hope Doug has made sure that there are no troublesome skeletons from the past that might come in the way of US laws that Walmart likes to be governed and guided by, because of Jabong’s past.

Also, Doug must surely have been apprised that earlier this year Flipkart lost an appeal against the income-tax department over the reclassification of marketing expenditure and discounts as capital expenditure, which will surely involve substantial tax liabilities from the past. Just for Doug to know, this ruling was made in December last year, and the issue involves money spent by e-commerce companies on marketing through deep discounts. Flipkart (and Amazon, too) has been classifying these discounts as marketing expenses and deducting them from revenue, leading them to posting losses and, therefore, not being liable to tax. The tax department, however, contends that this is not a cost but a capital expenditure which means it should not be deducted from revenue. This issue of deep discounts might need further briefing to Doug as the Confederation of All India Traders (CAIT), an umbrella association representing millions of India’s small traders, has also been demanding government scrutiny of Flipkart’s predatory pricing through deep discounts. So, Doug does need to know that while he is taking ownership of India’s largest e-tailer, there are issues from the past that might somewhat temper the euphoria.

Read More about Walmart flipkart deal

Paytm now allows users to pay through BHIM UPI on its platform

This BHIM UPI will allow users to createtheir own Paytm BHIM UPI ID on the app, which will be issued by Paytm Payments Bank

 

Digital payment platform Paytm on Tuesday introduced payments using BHIM UPI on its platform, using which users can create their own Paytm BHIM UPI ID on the app, which will be issued by Paytm Payments Bank.

Also, Paytm users can link any of their savings bank account with this unique Paytm BHIM UPI ID and start sending and accepting money.

With Paytm BHIM UPI, users can now make seamless and instant money transfers directly between two bank accounts, with no waiting time to add beneficiary. They will also not have to share their bank account details and IFSC code with anyone to receive money. This will enable a larger pool of Paytm users to transact digitally with more choices, greater ease and convenience.(economy policy)

To create UPI ID, users can go to the BHIM UPI section on the Paytm app home screen. These IDs will be users' registered mobile number. For example, if a Paytm user's registered mobile number is 9123456789, the UPI ID will be generated as 9123456789@paytm. Users can link their Paytm BHIM UPI ID with their existing savings bank account.

Paytm will also be training its five million merchant partners to create their Paytm BHIM UPI ID and accept money using the same. Merchants will also get the flexibility of adding multiple bank accounts with the single Paytm BHIM UPI ID and accept money directly into their bank accounts. As per the National Payments Corporation of India (NPCI) guidelines, users can send up to Rs. 1 lakh a day using BHIM UPI; while there's no receiving limit....READ MORE<<<<

BookMyShow looks for Flipkart’s backing to combat Alibaba

A minority stake in BookMyShow to give Flipkart a play in the fast-growing online ticketing space and also an access to a high-spending loyal customer base

Amid competition from deep-pocketed global players like Alibaba, India’s leading online ticketing platform BookMyShow is looking for a backing in its space from Flipkart, the country’s largest internet company.

While Flipkart BookMyShow Deal has been one of the few profitable internet companies in India, with a profit of Rs 3.1 crore on a revenue of Rs 248 crore in the year that ended March 2016, competition from rivals like Paytm has caused sales growth to slow.

To shield itself from cash-burning rivals, BookMyShow will sell a minority stake to Flipkart, a behemoth with a cash reserve of $4 billion. For the e-commerce major, a stake in BookMyShow will give it a play in the fast-growing online ticketing space and also an access to a high-spending loyal customer base.

Also Read : economy  policy

According to Livemint, which reported the story first on Monday, Flipkart is interested in outright ownership of BookMyShow, but talks have largely steered towards purchase of a minority stake in the company. Both companies have a common investor in Accel Partners, one of the oldest and reputed early-stage VCs in the country.

Flipkart has been an active investor in other internet businesses and its acquisitions like Myntra, Jabong and PhonePe have borne fruit. Myntra says it will become profitable at an earnings before interest, tax, depreciation and amortisation (Ebitda) level by March 2018, while PhonePe says it is the largest digital payments player on UPI.

While Flipkart is looking at categories like groceries to get customers to buy from it more often, the model will take time and significant investments over the next few years. On the other hand, online ticketing, already an established market in India, will give Flipkart the desired repeated purchases on its platform. Read More

RBI removes walls between e-wallets, soon a Paytm user can transact with a MobiKwik user

Inter-operability to help players increase business

 

 

 

economy news: To make the use of digital cash more prevalent and convenient, a digital wallet user would soon be able to accept cash from the user of another Ewallet, because of the Reserve Bank of India (RBI) tweaking its guidelines.

 

For example, a Paytm wallet user would soon be able to accept cash from a PhonePe wallet user.

 

Opening up the strings of digital wallets, the RBI on Wednesday said it would issue revised directions by October 11 to allow “inter-operability” among prepaid payment instruments (PPIs). These include digital wallets, prepaid cash coupons and prepaid telephone top-up cards. PPIs are a substitute for paper currency.

 

It is expected that PPIs can inter-operate within six months of the revised directions, the RBI said in its “Statement on Developmental and Regulatory Policies”.

 

ALSO READ: RBI pauses, revises growth forecast down sharply

 

The RBI said the feedback received was examined and it was decided to rationalise the operational guidelines with a view to encouraging competition and strengthening security of operations, besides improving customer grievance redressal mechanisms.

 

The first guidelines for issuance and operation of PPIs came in April 2009 with the objective to create an ecosysmte. In March, the RBI asked for feedback on the PPI industry. At present, two people using the same digital wallet can do transactions; in less than six months, people using digital wallets from different companies would be able to send and receive money from each other. Read More

Holidaying this long weekend? Railway over flight is the traveller's choice

However, attractive pricing has given airlines an edge over the railways among youngsters

It is widely believed that the Indian railways is struggling to retain its customer base, which it is losing to various airlines. However, if the numbers are to be believed, the rail route is still the most favoured mode of transport for weekend travellers.

According to industry estimates, approximately 1.5 million Indians will be taking flights over the coming weekend starting from August 12, while the number of people travelling in non-suburban trains alone will come to around 44 million. Last year, during the same time, the railways carried 42 million passengers, while airlines carried only 1.2 million.

economy news

"While about 1.5 million Indians will be travelling via flights over the four-day-long weekend, people travelling in non-suburban trains (intercity) will be around 44 million. That's roughly about 29 times more travellers in trains versus flights," said Aloke Bajpai, chief executive officer and co-founder of Ixigo, an online travel platform. According to Ixigo data, the top-most holiday destinations for train travellers are Goa, Jammu, Tirupati, and Amritsar, while flight travellers prefer Goa, Leh, Kochi, and Udaipur.

According to Paytm, weekday versus weekend travel patterns of Indians reveal that people between 25-35 years of age were 26 per cent more likely to travel on weekends, while people below 40 years were 17 per cent more likely to travel on long weekends. There was hardly any deviation in weekend versus weekday travel patterns of senior citizens, implying that long weekends don't excite them too much......read more

 

E-wallets to the rescue: How to turn credit card money into hard cash

And it is free if done through e-wallets. But wallet companies can block repeat offenders

A few weeks earlier, Paytm had started charging its customers a two per cent fee for adding money to the wallet using their credit cards. However, the mobile wallet company withdrew the fee after a week, saying it would cause inconvenience to a large section of their customers.

So, how does one transfer credit card money into a bank account via an e-wallet? The mechanism is quite simple. A user sends money to the wallet through his credit card, say Rs 15,000. Well-established mobile wallets such as Paytm, MobiKwik and FreeCharge allow funds in the wallet to be sent to any bank account. All the person has to do is enter his account number and the National Electronic Funds Transfer (NEFT) code. He can send the entire Rs 15,000 to any bank account he wishes to.

 

Most wallet companies don’t allow transfer of funds immediately. One can send the money to a bank account only after 48 hours. The best part: There are no charges on deposit or on withdrawal of money from the wallet. The wallet provider bears the cost.

It’s a smart way to get a hassle-free loan. An individual does not need to fill up an application form, share documents, wait for the approval, and so on. There’s no fear of rejection because of a low credit score. It can also be at zero cost if the person pays back the issuer before the due date. To many, it may look line an easy credit line, but it’s not.

A few do it to earn points on their credit card without actually spending on anything. But banks have to report to the income-tax

(I-T) department all users who spend over Rs 2 lakh on their credit cards annually. If your income doesn’t justify such spending, the tax authorities could call you to explain the source of money.

Wallets players are watching: Mobile wallet companies absorb the transaction cost levied by banks, as they are focusing on acquiring new customers and on making their services popular. They want users to transact using their wallets and not use it as a medium to rotate money. They have started analysing the spending patterns of users and blocking those who are using their wallets for “unintended purposes”.

“We use algorithms, machine learning and other technologies to understand the spending patterns of users. The technology platform gets smarter every day. Narrowing down on users who are rotating money and blocking them is not difficult,” says Daman Soni, vice-president (growth), MobiKwik. He further explains that when the company studied spending patterns, it realised that many users who added money from their credit card to their wallet and then transferred the funds to their bank account were first-timers trying to understand how the platform works.

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Now pay two per cent fee for recharging your Paytm wallet via credit cards

Move comes to tap merchants who exploited the loophole to gain credit points

 

#LATEST | Ever since demonetisation, people have been looking for ways to bypass the digital transaction fee they have to pay. 

Targeting the small merchants, Paytm had, in November, introduced zero per cent platform fee, to encourage them to accept payments through their wallet during demonetisation. However, merchants used this facility to add money to the wallet and transfer it back to their linked accounts without paying any transaction fee. This was costing Paytm a hefty amount. Also, adding money to the Paytm wallet though credit card gives credit points that can be used to buy goods. People used this loophole and earned plenty of points. 

" We saw a disturbing trend when many users started funding their Paytm wallet with their credit cards and transferring it to the bank all for free. They were not only getting free loyalty points which effectively is free cash but also getting access to free credit," Paytm said in a blog.

In the wake of this situation, Paytm will now levy a two per cent fee for adding money to the e-wallet using credit card. However, it will give an equal amount of cash back for using credit card to add money in the wallet. The cost of adding money to the wallet through other modes such as net banking and debit cards remains non-chargeable.

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