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QwikCilver stake buy would give Amazon India a wallet


Amazon India is in advanced talks to pick up a minority stake in the gift card & stored value solutions provider QwikCilver Solutions, reports The Economic Times citing three sources. A source told ET that Amazon may pick about 20% stake in QwikCilver.

It says Amazon’s competitor Flipkart is also apparently in talks with QwikCilver, although sources told the publication that talks with Amazon have progressed further. Amazon declined to comment on this to ET while Flipkart and QwikCilver are yet to respond to the publication.

Note that QwikCilver currently powers the gift card service for both Amazon and Flipkart, besides operating an online gift card & gift vouchers store Giftbig.com. The company is backed by investors like Accel Partners and Helion Venture Partners.

Prepaid wallet license

If true, this could be a strategic investment for Amazon since it would give them access to a semi closed wallet system for its marketplace, which will allow Amazon customers store money in their wallet and use it to purchase products from the site. QwikCilver had secured a five-year prepaid mobile wallet license from RBI in August last year along with Mobikwik and Paytm which launched a physical goods marketplace in February this year.

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Flipkart also has a prepaid wallet service although it was later restricted to products sold only by WS Retail, that manages the e-commerce major’s front end retail operations. The company had applied for a semi closed wallet license through its payment gateway business Payzippy in July last year but has so failed to get a license. This license is necessary for Flipkart to extend its wallet service to all sellers on its platform.

It is however unlikely that RBI will issue fresh prepaid payment wallets licenses after announcing a set of draft guidelines for setting up Payment Banks, including for prepaid payment wallet companies in July this year. The Nachiket Mor committee in January 2014, had also recommended that the existing and new PPI issuer applicants should instead be required to apply for a Payments Bank licence or become Business Correspondents (BCs).

Flipkart also mentioned in August this year that it is phasing out Payzippy and is not accepting any new merchants at the moment. The company said that nothing will change for customers, since the technology developed by the Payzippy team will continue to power payments for Flipkart. It will also be interesting to see what happens to Flipkart’s tie-up with QwikCliver if the Amazon deal goes through.

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