Indian online marketplace Snapdeal, will soon be offering a payment gateway for their sellers.
The new gateway will serve marketplace merchants and will be offered to 3rd party companies as a payment solution.
One of the main reasons Snapdeal is offering the new gateway is because of the immense popularity of Cash-on-Delivery (COD) in India. COD payments are harder to track, and require an appropriate logistical support. While online purchases are growing in India, the attachment of COD with its residents poses an obstacle. India’s population is higher than 1.2 billion people, with only 400 million cards in circulation. Those numbers are incredibly low in comparison to other emerging countries.
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“In our business, the core marketplace is the king, the logistics platform the queen, while the payments platform is the jack. We need to get this entire stack in place,” added Kunal Bahl, co-founder and chief executive of Snapdeal.
The not-yet-named gateway will work in similarity to eBay’s PayPal, and will store credit card details, shipping information and will allow for quick completion of transactions in just a few simple clicks.
Interesting enough, we recently saw Amazon.in embracing the COD method of payment rather than shifting Indian residents to online transactions. Amazon however has the resources to recruit the Indian Postal Service to assist with the logistics behind accepting cash on such a large scale. With the growth of ecommerce transactions in India, we can only guess the amount of credit cards, debit cards, and alternative payment methods offered in India will grow as the industry does.