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We all have at one time or the other ordered shoes, clothes or phones from Amazon and Flipkart. These companies have settled in our mind only as ‘online shops’. But now the picture is about to change. These companies no longer want to be limited to just selling goods, but they are also making a strong entry into your pocket, i.e. the world of banking and finance.
Imagine, you need money to expand your business or buy something expensive on installments, and instead of visiting the bank for this, you just open your shopping app and the work is done. Sounds so convenient, right?
Amazon: New support for small shopkeepers
Amazon has completed preparations. Their eyes are on the millions of small businessmen who sell goods on their platform. Often these small sellers face financial crunch or cash flow problems. To solve this problem, Amazon has partnered with a Bengaluru-based company ‘Axio’ (non-bank lending firm), which it bought this year.
The objective is clear – to create such loan plans for businessmen that fit their needs, so that they do not face shortage of money to run their business.
Flipkart: Loan and EMI preparation for customers
On the other hand, Walmart-owned Flipkart is also not behind. Flipkart is focusing its entire focus on common customers like us. There is news that the company is going to launch its own ‘Flipkart Finance’ service. At present, they are waiting for the final approval from RBI for this.
Once approved, you’ll get plenty of ‘buy now, pay later’ and easy installments (EMI) options on Flipkart. It is being told that no interest will have to be paid on installments of 3 to 24 months. Yes, if you take a very expensive item on loan for a long time, the interest rate can be between 18% to 26%.
Why is there so much love suddenly?
Now the question arises that why do these shopping companies want to become ‘banks’? The answer is simple – India’s loan market. The loan market in India is going to reach around $212 billion by 2025. Since we use UPI a lot for payments, these companies already have our data on how much we spend and what we buy. By taking advantage of this data they can give us the right loan offer.
RBI has also recently relaxed the rules, giving e-commerce companies the freedom to disburse loans through their 100% stake companies.
FD for Rs 1000 also?
The interesting thing is that now you can start a fixed deposit (FD) on Amazon Pay with a small amount like Rs 1000. That means the shopping app is now also becoming a saving app. Overall, in the coming days, these shopping apps on your mobile will be seen working as a small bank, which is a good news for both customers and shopkeepers.
