January 3, 2014
In July 2013, Flipkart launched their payment gateway called PayZippy. According to Flipkart, they had started working on this solution 2 years ago. PayZippy was mainly launched to address the payment failure, fraud and checkout issues of customers. Snapdeal, another eCommerce giant, announced the launch of its payment gateway Klickpay on 2nd January 2014.
Klickpay seeks to create a safe platform wherein Indian users can buy and pay online in a secure manner. It encrypts sensitive data such as credit card number, expiry month and year before passing it on to merchants.
I have been observing a trend in the journey of some leading Ecommerce companies w.r.t, accepting payment. It goes something like this – an Ecommerce company starts accepting card payments using a third party payment gateway provider. In the beginning, when the numbers are low, it seems to be the structure of choice with least amount of hassle. As the business grows, it reaches a phase where you try to build your own payment gateway (end to end). The way Amazon did in US and Flipkart did in India.
Whats most interesting is that there is a next stage as well. It comes when you have spent enough time and developed expertise to perfect your payment solution. Where the Ecommerce firm becomes so good in handling payments that it starts offering it as a platform based service to other merchants. E.g., Amazon Payments allows its users (merchants) to receive money using its API (and to send money out via ACH). Popular crowdfunding site Kickstarter uses Amazon Payments. Pay with Amazon, enables users to opt for their Amazon accounts to pay on third party e-tailing sites. Amazon Payments fees start at 2.9% + $0.30 per transaction for payments over $10. Amazon monthly fee for Pro Merchant accounts is $39.99. Flipkart also enables other merchants and websites to utilize PayZippy’s platform. Snapdeal may be heading in a similar direction.
KlickPay’s website says that it will support OAuth 2.0 protocol. This will enable developers to create a KlickPay account using a popup on their site. Once they’ve provided a name, email, mobile and password, they can start making payments instantly.
Features such payer network, checkout widgets, fraud detection and others are offered to merchants. Each customer, generates a Klickpay priority score from their online transaction history, social network influence, COD (Cash on delivery) returns and others to help merchants separate genuine orders from fake ones and prioritize their shipments. This score can also be seen by users on their respective profile pages.