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E-commerce: From Fintech Collaborators to Competitors

There has been an increasing trend wherein E-commerce giants are pushing for In-house Fintech solutions. Let’s look at few of the case studies to understand the interest.

Flipkart Advanz (BNPL): Few years back, Fintech companies found a great benefactor: E-Commerce websites. It was the right complement with Fintechs providing the tech & digital lending support to augment the cart size of buyers. People started purchasing 55″ inch TV when they came for 32″. It was a win-win for everyone. It led to everyone from Banks to Digital payment companies to alternative finance Fintechs jumping the bandwagon. Everything was going fine and Fintechs were suddenly seeing profitability and not just cash burns.

There are many success stories written for E-commerce + Fintech thanks to BNPL:

  • LatAm e-commerce revolution of 2020 thanks to BNPL
  • Affirm has one single E-commerce player contributing $1.2B in revenue
  • Affirm has tied up with both Amazon & Walmart for BNPL and it’s looking big
  • Big Banks in India like ICICI & Axis are offering BNPL solutions. RBI Report says growth at 30%+
  • JP Morgan / StanC large investments in BNPL Fintech firms to boost E-commerce
  • BNPL fuelling E-commerce interest in relatively Poor middle class of Africa

But the E-commerce giant Flipkart is not satisfied. It has launched its in-house BNPL service through its subsidiary Flipkart Advanz which is offering Rs70K (~$1000) credit as BNPL for purchase at its website. The advantages are complete control on the policies, rates and offers. Flipkart Advanz is 100% owned subsidiary of Flipkart which was launched in 2015. Flipkart also has a digital wallet/payment sister concern in PhonePe. The companies like Decentro is making it easier for any company to offer BNPL solution using banking APIs. This will become more relevant with BNPL 2.0 in B2B cases wherein large deals can be done in this model. The competition Amazon has tieup with Lazypay in India and as mentioned above with Affirm in US.

Amazon Pay(Digital Wallets/ Payments): Digital Wallets / Payments are no more the fiefdom of Fintech / Banking players. Many large E-commerce, retail giants have their payments solution; most notably the Apple pay, Samsung Pay, Amazon Pay, Walmart’s Phonepe (Flipkart).

The story is especially interesting with Amazon with the range of services offered through their native Amazon pay is just amazing. It’s a wallet, its a payment module, it also gives UPI. Amazon pay is adding hundreds of services to it’s portfolio and is looking to provide a full stack payment solution to you. Shouldn’t Fintechs feel threatened??


“Amazon is the most formidableIf Amazon can get you lower-debt payments or give you a bank account, you’ll buy more stuff on Amazon.”Andreessen Horowitz general partner Alex Rampell

source: What Amazon is Doing in Financial Services as Well as Fintech | CB Insights Research

Facebook (Cryptocurrency): In a real cryptic world of bitcoins & Dogecoins, Facebook is planning to launch it’s own cryptocurrency “Diem” by end of this year which it says provide better services, will enhance financial inclusion and cut cost. What is Facebook doing in Cryptocurrency and shouldn’t the Crypto companies be worried??

So why these mega giants foraying into Fintech?

There are a lot of existing synergies and advantages E-commerce players see with Fintech

  • They already have the UX and the tech available to them
  • It brings them more flexibility to configure their offers
  • Most importantly, it gives them deep insights into customer’s payment’s behaviour and add this to their native purchasing behaviour repository, they can create a holy grail of customer buying pattern

Be aware Fintechs, E-commerce is coming to eat your pie

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