Happy Monday folks! Vedica here with today's news. We've got some more payments news (fintech has been super top of mind lately) & Flipkart acquisition of Walmart India and it's foray into wholesale:
➡️ The National Payments Corporation of India (NPCI) has said that the Merchant Discount Rate (MDR), a charge to merchants to enable the acceptance of UPI / digital payments which is then split between banks and payment service providers (PSPs), is critical for servicing and spreading UPI in the country.
➡️ As context, in December the Finance Minister Nirmala Sitharaman had said there will be no MDR charges, which will be applicable, on RuPay and UPI platforms. The reason given for the zero MDR was to increase adoption of digital payments across the country.
➡️ However, this turned out to be a classic case of not thinking through the impact of regulations, because zero MDR basically left UPI payment apps and players with no revenue model around the infrastructure. Several large players began to move away from expanding the acceptance of UPI, questioning its monetisation model.
➡️ So it's important that Dilip Asbe, MD & CEO, NPCI, made the following intervention recently, “MDR is necessary because it funds the acceptance, servicing and acquiring infrastructure for UPI in the country, and we are trying to get MDR back." How this pans out will be important. UPI has been a massive success story for India, and its important that a robust ecosystem is built around it.
2. https://bit.ly/2CPyliL: Flipkart acquires Walmart’s India business; launches Flipkart Wholesale
➡️ Flipkart last week acquired a 100% interest in Walmart India, which operates the Best Price cash-and-carry business. Flipkart is, of course, majority owned by Walmart so there's some circularity here! The aim of the acquisition is to strengthen capabilities and improve Flipkart's B2B service offering.
➡️ The Best Price brand will continue to serve its over 1.5 million members via its omnichannel network of 28 stores and e-commerce operations. The company also operates 2 fulfilment centres in India – Lucknow and Hyderabad.
➡️ Flipkart also announced the launch of Flipkart Wholesale, a new digital marketplace to that will leverage both Flipkart and Best Price to help transform the kirana retail ecosystem in India. As we all know kirana tech is super hot in India right now.
➡️ Flipkart is clearly hoping to strengthen its positioning in B2B segment (the company has been testing B2B waters for the past 6-8 months with a pilot in the Delhi NCR region). This is, of course a crowded space with Metro, Reliance, Udaan and Amazon all playing.
Feedback & ❤️ always appreciated BONUS (Tweet of the day): https://twitter.com/mdudas/status/1286987679184322565?s=20
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