Flipkart acquires FX Mart

India’s largest e-commerce firm Flipkart has bought payment services start-up FX Mart Pvt. Ltd, which holds a prepaid wallet license, so as to add a payment service on its platform and on that of its unit Myntra. Singapore registered Flipkart Payments Pvt. Ltd, paid Rs. 45.4 crore for a majority stake in FX Mart and two senior Flipkart executives also joined the board of FX Mart.

FX Mart owns a coveted prepaid license issued by Reserve Bank of India. The license will allow Flipkart to offer a digital wallet on its app and avoid paying a cut to external wallet providers. The license can also potentially help Flipkart increase the proportion of cashless transactions. A majority of shoppers still prefer paying cash for online purchases, which creates operational headaches for e-commerce companies.

With FX Mart License, Flipkart which has been a laggard in payments plans to launch a payment service on its app as well as Myntra within the next three months. The company also plans to offer the payment service on third party sites and apps later. The current market leader is Paytm followed by a host of smaller firms such as Oxigen Services India Pvt. Ltd and One MobiKwik Systems Pvt. Ltd.

India has several others payment services start-ups including Citrus Payments Solutions Pvt. Ltd, PayU Payments Pvt. Ltd, CCAvenue and Zaakpay. FX Mart offers electronic payments, foreign exchange and travel services. FX Mart is Flipkart second acquisition in digital payments. It bought another payments start-up NGPay last year.

PayPal bought Money Transfer service Xoom

PayPal has made a few significant acquisitions since 2013, including purchasing Paydiant and Braintree. Now, PayPal said it would buy digital money transfer provider Xoom Corp. for $890 Million as it muscles into a growing international remittance market and expand in countries like Mexico, India and China ahead of a spinoff from eBay Inc.

Xoom, which has 1.3 Million customers and a presence in 37 countries, allow users to transfer money via desktop, mobile phones and tablets. The acquisition would allow Xoom to expand into new markets with less execution risk. Xoom will operate as a separate service within PayPal after the completion of the deal.

PayPal faces increasing competition from rivals like Stripe and Square, which is popular with smaller businesses and Apple Inc.’s Apple Pay. Online commerce foe Amazon Inc. is also beginning to explore in store payments. The company is slated to separate from eBay this month and list as an Independent company.

PayPal has been pushing hard into mobile, where customers are more frequently making everyday purchases. The company has touted its peer-to-peer money transferring division Venmo, used primarily by smartphone touting millennial, and earlier this year bought app developer Paydiant.

Klarna Eyes Indian Shoppers

Klarna is a Sweden based e-commerce company that provides payment services for online storefronts. Their core service is to assume store claims for payments and handle customer payments, thus estimating the risk for seller and buyer. About 20% of all e-commerce sales in Sweden go through Klarna. The company has stores in seven countries in Europe. There is an office in Israel, which focuses on Research and Development.

European payment provider, which allows consumers to make online purchases using only their e-mail address and postcode with no registration or credit cards, is exploring the possibility of setting up business in India. The Stockholm based company is currently valued at around $1 Billion and active in 16 countries. The company was founded in 2005 by three students at Stockholm school of Economics and has 1,100 employees across the countries, which has its operations.

Klarna integrates the payment methods promising to make online shopping easier. About 35 Million customers have shopped from Klarna and company has 50,000 merchants. The company is focusing on removing friction and hassles from online buying. For using Klarna, there is no need to create an account or a password. Customers can shop using only their email address and postcode. The customers then confirm the purchase before choosing a payment method. Klarna has also introduced Pay after delivery as a Payment option, where the customer has 14 days to pay. This means the customer gets their goods and can make sure they are ok before paying. For this, Klarna gives full guarantee to the customers as well as merchants.

For every purchase, the company also performs a swift background check on customer information based on the speed at which they type their email address and postcode. Klarna claims to be the one of the fastest growing e-commerce companies in Europe and having a 10 percent market share of e-commerce in Northern Europe. Klarna is active in Austria, Belgium, France, Germany, Hungary, Italy, the Netherlands, Poland, Spain, Switzerland, the UK, and the US.