wordpress blog stats
Connect with us

Hi, what are you looking for?

What If RIL Does Create A Payment Gateway?

American Express, the US based Banking & financial products company, is in talks with Mukesh Ambani owned Reliance Industries Limited (RIL) to launch a JV in India that will offer financial services, including a payment gateway, according to a report in The Economic Times. The report cites unnamed sources saying that a payment gateway solution is high on RIL’s priority list, since it plans to launch broadband services. The spokespersons of both companies have reportedly not commented. Remember that RIL had bought 95% in wireless broadband auction winner Infotel, for Rs 4800 crore.

Why

– Telecom operators like Airtel, RCOM, Vodafone and Tata Tele etc offer primarily pre-paid services, and payments are automatically deducted from consumer accounts. They typically do not have standardized billing terms and conditions, and the reach of their billing services is limited to a few value added services companies. We’ve written about this issue before. RIL may be looking to tap a larger, merchant ecosystem, to open up commerce external on mobile and broadband. Remember that this approach appears to be similar to what InMobi is attempting with its SmartPay solution, offering developers alternative billing services.

– RIL is planning to launch LTE, which – according to industry rumors – is probably going to serve two functions – as a backhaul for 3G services (since existing mobile operators have limited spectrum), and mobile broadband services. An independent payment gateway solution will give it a broader playing field, taking it beyond just its mobile broadband services.

– Why AmEx? We checked, and payment gateways EBS and DirecPay, among others do not accept AmEx payment products. Since the company has positioned itself as a niche player in the payment products market, the move will enable it to directly authorize and process payments.

– Why a JV? From a technology perspective, there are payment gateway service providers that RIL could buy for a few tens of crores, so we’re not sure of why exactly they would be in talks with AmEx. AmEx does operate payment gateways on its own in other markets, so this could end up being a technology tie-up.

Advertisement. Scroll to continue reading.

What If

The online payment gateway situation in India is ripe for disruption – I’ve hardly ever come across an e-commerce company that is happy with its payment gateway partner, and there are few plug-and-play payment gateway solutions available, that allow merchants to retail products, akin to Paypal, which is universally accepted, and easy to deploy. A plug-and-play merchant solution that doesn’t go down regularly and allows small merchants to set up e-businesses at a low set-up cost could well result in providing further scale for the e-commerce business. RIL typcially plays the economies-of-scale game, as it showed when it brought down mobile prices with the launch of Reliance Infocomm (later called Reliance Communications).

(with inputs from Anupam Saxena)

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

By Rahul Rai and Shruti Aji Murali A little less than a year since their release, the Consumer Protection (E-commerce) Rules, 2020 is being amended....

News

By Anand Venkatanarayanan                         There has been enough commentary about the Indian IT...

News

By Rahul Rai and Shruti Aji Murali The Indian antitrust regulator, the Competition Commission of India (CCI) has a little more than a decade...

News

By Stella Joseph, Prakhil Mishra, and Surabhi Prabhudesai The recent difference of opinions between the Government and Twitter brings to fore the increasing scrutiny...

News

This article is being posted here courtesy of The Wire, where it was originally published on June 17.  By Saksham Singh The St Petersburg paradox,...

You May Also Like

News

Compared to the previous month, April saw a decline in the number of transactions for both PPIs and Mobile Wallets but the average transaction...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ