Enabling Technologies

Banks Eager to Participate in a Bigger Way in Commerce

Banks have been closely watching the e-commerce sector evolve sitting at the fence. The only participation was with regard to processing payments (that too partially). With the growth in e-commerce sector at an all-time high (especially in some regions), banks wanted a bigger pie of the transactions. Let’s take a look on some of the countries in this respect:

China:                                                                 

Banks ventures into e-commerce market:

- Industrial & Commercial Bank of China Ltd. (ICBC), which as the world’s most profitable company dwarfs Alibaba’s net income by more than 10 times, set up a platform allowing retailers to sell the bank’s customers wine, shampoo, appliances and more.

- China Construction Bank (CCB) launched an online mall, buy.ccb.com

Some facts to know about China ( 2014):

E-commerce penetration: $440 billion

Internet penetration: 48%

Banking penetration: 79%

India:

Banks ventures into e-commerce market:

- Among banks, ICICI bank was the first to introduce “Pocket,” a mobile wallet solution that integrates prepaid card and a basic savings bank account.

- In June, HDFC bank launched the PayZapp app, an all-in-one mobile payment and money transfer app, through which HDFC bank customers can do mobile commerce, pay bills and P2P payments.

- State Bank of India (SBI), the largest bank in India, announced that it will be launching its mobile wallet service “SBI Buddy” this month

Some facts to know about India (2014):

E-commerce penetration: $14 billion

Internet penetration: 19%

Banking penetration: 53%

USA:

- Banks partnering/investing in FinTech startups

- Banks starting to launch wallets for online shoppers

Some facts to know about USA (2014):

E-commerce penetration: $294 billion

Internet penetration: 87%

Banking penetration: 94%

LatAm:

- Key geographies: Brazil, Chile, Argentina, Mexico

- Low digital wallet adoption

- World leader in terms of correspondent banking

Some facts to know about LatAm (2014):

E-commerce penetration: $58 billion

Internet penetration: 52%

Banking penetration: 51%

Africa

- Key geographies: Nigeria, South Africa, Kenya & Ghana

- Very less bank penetration. Banks launching products & software for facilitating online business

Some facts to know about  Africa (2014):

E-commerce penetration: $1.1 billion

Internet penetration: 28%

Banking penetration: 34%

Australia

- Banks innovating their offerings for online retailers

- Retailers & other FI’s partnering with banks to launch wallets and other product offerings

Some facts to know about Australia (2014):

E-commerce penetration: $20 billion

Internet penetration: 90%

Banking penetration: 99%

Key Global Trends

- Blurring lines between banking & E-commerce firms

- Banks partnering as well as competing with retailers

- Partnership among FI’s

- Banks own wallets gaining popularity and acceptance

Priti Thakur

Priti has keen interest in digital money and fintech startups . She completed her B-School education this year and likes to write about innovation with respect to digital payments.

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