MC Interview: Flipkart to launch its payment product within a month, says CEO Kalyan Krishnamurthy

He added that it will follow this up with multiple financial services products that are likely to increase the frequency of its customers using the platform and enhance the customers’ purchasing power to buy more products on Flipkart.

Also read: The crisscrossing paths of Flipkart and PhonePe

“The bigger opportunity there what we are trying to do is frequency. We want people to keep coming back so that eventually they will do commerce. In my mind, payments and fintech, the word fintech is generally used quite loosely, is very different,” Krishnamurthy said.

To be sure, Flipkart had in last July launched a lending marketplace in partnership with banking partner Axis Bank. It also runs one of the country’s most successful credit card programmes, a cobranded card with Axis Bank, which has more than 4.5 million active consumers. Its buy now pay later product Flipkart Pay Later also has been around for a few years.

“For financial services – we are partnering with financial institutions. In India, if you just look at the way consumers buy high ASP (average selling price) products – televisions, refrigerators, or even expensive phones, they take some kind of lending product attached to the primary product. So, for us, that's very important to see it as part of the core value proposition for high ASP products,” Krishnamurthy said.

Flipkart also provides insurance and mobile recharges on its platform, typically products that fintechs sell to their customers.

As it happens, its main rival in the country, Amazon also has a similar full suite of payment products from credit card, BNPL, UPI along with insurance and investment products.

Krishnamurthy said that while the idea is to get customers to be able to afford more, Flipkart can also make money.
“We believe there is an opportunity for us to make a little bit of money here from the financial institutions who we pass on the lead to. Payments is more about frequency, we want people to come back to Flipkart and do commerce,” he said.

Krishnamurthy added that the company has no ambitions to be a large payment or fintech company with its financial services foray.

“We are not trying to be the largest payments company in India. Again, no such ambition or don't even have the bandwidth or appetite to do anything close to that,” he added.

The country’s largest payment player PhonePe was incubated within Flipkart and has since been spun off as an independent entity, with the process getting completed in 2022. Til then, it did not make sense for Flipkart to make investments into building a financial services platform of its own. PhonePe has close to 50 percent market share in UPI, the world’s largest real-time mobile payment system.

Launching a UPI platform is likely to provide a faster and easier checkout for customers without having to hop to another payment app, which likely increases friction or the chances of a payment failure.

“Every time a transaction goes through, there are drop offs and that's not a good experience for the customer. Whatever we believe helps you make payment in the most convenient format, the fastest, easiest, and affordable is the way we will think about it. There is absolutely no mandate or anything going to be that I'm going to focus on this and remove these,” Krishnamurthy said.