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India’s largest e-commerce marketplace Flipkart has reportedly bought a majority stake in Delhi-based digital payments services start-up FX Mart. Debuted in 2013 with its headquarter in Mohali, FX Mart deals in electronic and digital payments, recharge, remittances, foreign exchange and travel related services. According to various online media reports, the move is in sync with Flipkart’s objective to add a payment service on its platform and on that of its subsidiary Myntra, an online fashion portal.
As per Live Mint report, Singapore-registered Flipkart Payments Pvt. Ltd has paid around Rs 45.4 crore to buy a majority stake in FX Mart, according to documents available with the Registrar of Companies (RoC). The documents further show that, in near future, two senior Flipkart executives will also join the board of FX Mart.
Flipkart officially declined to comment any further on the new deal, whereas, an official e-mail sent to Amit Narang, Founder & MD, FX Mart, didn’t elicit any response.
Empowering Digital India
The start-up had also obtained license from RBI on semi closed prepaid instruments in August 2014 and license on full-fledged money changing in May 2013. Recently, the company even applied for Payment Bank License with RBI. Further, in collaboration with National Payment Corporation of India (NPCI), the firm soon plans to launch IMPS Service to facilitate instant domestic money transfer in India.
With offices in 8 major locations and a strong network of over 1,000 agents across country, FX Mart, in line with Government’s mission, strives to turn India in a digital or cashless economy. Narang himself is a well known industry professional with more than 25 years of experience in Finance, Forex and Travels. By virtue of his entrepreneurial skills and business leadership, he is reckoned as one of the pioneers in developing the Remittance and Forex businesses in India.
With fuelling online sales and growing e-commerce base, the digital payment industry has been witnessing new innovation and rapid development. Today, creating a strong electronic payments ecosystem is now of utmost importance for all online retailers. These are the backbone and huge support pillars for online merchants in order to reduce shopping cart abandonment.
FX Mart is Flipkart’s second acquisition in digital payments. It bought another payments start-up NGPay last year, although no new payment technology or service has come out of that company so far. According to the Live Mint report, Flipkart plans to launch a payment service on its app as well as Myntra’s within the next three months.A majority of shoppers still prefer paying cash for online purchases, which creates operational headaches for e-commerce companies. Giving them choice of payment options simply provides more convenience and security when making online purchases. Thus, investment in this space demands attention of leading e-tailers.