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Updated: What Is Flipkart Doing Differently With Its Online Payment Solution PayZippy?

payzippy-logoFlipkart Payment Gateway Services Pvt. Ltd. has launched an online payment solution, PayZippy. The company claims that the launch version of PayZippy supports card payments for domestic merchant websites and mobile sites. The company claims that the service has become operational with four banks.

What is Flipkart doing differently with PayZippy?

Speaking to Medianama, Mekin Maheshwari, Head of Payments & Digital Media at Flipkart said that the success rate of transactions going through payment gateways is crucial to merchants. While payment gateways tend to pick banks which offer lower pricing, Flipkart intends to partner with banks that provide higher efficiency, even if it meant higher pricing.

Maheshwari explains that the problem lies at different stages of the payment process. The success rate varies by the issuer. While the payment gateways have no control over the issuer, gateways have control over bank gateway that they connect to for any card.

Update: Flipkart has clarified that bank payment gateways have very high variances in success rates, over time and across different types of cards. They have even noticed that at times off-us transactions are more successful than on-us transactions for some banks. This is an exception, but it happens.

The company claims to have been working on this payment solution for the last two years and observing automated monitoring and routing to create analytics on success rates of different cards through different payment gateways. This service is meant to add to the bottom line of Flipkart’s ecommerce venture overtime although no number have been disclosed about it. PayZippy also offers real-time tracking of bank gateways, similar to the real-time tracking launched by CCAvenue in February 2013.

Another interesting point to note is that PayZippy offers flat transaction fees. For debit cards, it charges 0.7% transaction fees for value less than Rs 2000 and 1% transaction fee for value less more than Rs 2000. For credit card, it charges 2.5% transaction fee for monthly transaction value of Rs 0-5 lakhs, 2.25% transaction fee for monthly transaction value of Rs 5-10 lakh, 2% transaction fee for monthly transaction value of above Rs 10 lakhs.


Security for other merchants: The company claims that the online payment solution is PCI DSS certified and is backed by an indigenous fraud detection system. When asked about other ecommerce websites using Flipkart’s payment gateway, Maheshwari says that Flipkart will also be treated as one of the merchants of PayZippy and that PayZippy is operated by a separate entity, Flipkart Payment Gateway Services Pvt. Ltd.

In February 2013, Flipkart had launched its marketplace. It makes sense for Flipkart to launch its own payment gateway so that it can reduce its cost and control its infrastructure from frontend to backend. We believe the payment gateway will be mostly used on its own marketplace than pushing it to other merchants (ie hire sales). Besides this, with the launch of Amazon India marketplace in the country, it has become increasingly important for Flipkart to offer seamless service. Current payment gateways do not offer a seamless service and are notoriously known for high transaction failure rates.

Other payment gateways in the country include Paytm payments, PayU, CCAvenue, Billdesk, EBS, among others.

Apurva Chaudhary contributed to this article. 

Disclosure: CC Avenues is an advertiser with MediaNama

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