Digital services marketplace JustDial is eyeing an April 2015 launch for the launch of its JD Cash service, which allows merchants to accept payments via its platform. Back in August 2014, the companys founder VSS Mani had said that “There are lot of cases where people want to take micro payments or even otherwise like pay, so you can order food from the restaurant, you want to actually pay online.”
JD Cash will allow users to use credit cards, debit cards or net-banking, or “just in case you want to buy from something from a store which does not except online payment, or you are buying it through JustDial, we can collect the payment from you and then credit the vendor (using) the digital cash.” This, according to the company gives the merchant the confidence to deliver the product to the customer. Note that there are cases where customers refuse to accept cash on delivery goods, which essentially means that the merchant incurs a cost for delivery.
The product is ready to roll out next quarter (April-June 2015), and Mani said on the company conference call that quite a bit of the work is done. However, the company says it needs to be careful: “…as you know it is all about money moving from one place to the other it has to be 100% tested and foolproof.”
The company is considering a wallet as well, which will require a prepaid-payment instruments (PPI) license, of the type that a Paytm*, Itz Cash or an Oxigen has, and in the interim period it says it will “manage with some of the existing people who have that license.”
A payments bank application, for which there have been 41 applications, is not a part of its plan.”The existing regulation itself will allow us to operate the JD cash,” a company executive said on the call. However, bear in mind that the RBI appears to be primarily focused on the Payments Bank approach, so we’re not sure if it would, in future, allocate a PPI license.
JustDial will need a wallet to operate JD cash, or have to partner with one, because it is a marketplace. If it were an ecommerce player, and owned the inventory or the services that customers were buying on its site, it would effectively be operating a closed wallet, which would not need a license. Since customers are buying from merchants and service providers via JustDial, it needs a semi-closed prepaid payment instrument (or a semi-closed wallet).
Also, note that SAIF Partners, which is an invester in JustDial, is also an investor in Paytm, which has a wallet license from the RBI, and has applied for a Payments Bank license via its founder Vijay Shekhar Sharma.
Note: some part of the text from the concall has been rephrased for clarity and language.
Disclosure: Paytm is an advertiser with MediaNama