The Indian e-tail boom—driven by a $22-billion e-commerce industry, as per a PwC India report—promises a killing for online payment services. HDFC Bank, for example, saw near-30% growth in fee income for banking services—which includes charges for online payments—in the quarter ended March 2015. But with RBI having received 41 applications, including telecom majors like Airtel and Vodafone, for payments banks licence and with the growing usage of online payments systems like Paypal, Paytm, Freecharge, etc, banks may soon have to look at new ways to ensure online shoppers stay with them. Indeed, there is also the challenge from tech majors—a Google Wallet or an Apple’s iPay—to consider.
Banks, therefore, would perhaps be better off by taking a leaf from HDFC Bank’s book. The bank, as per a report in The Economic Times, is tying up with e-tail majors like Amazon, Flipkart, and Snapdeal to offer online shoppers a bouquet of deals from these e-tail players on the bank’s website itself. The bank doesn’t sell the goods directly—the rules don’t permit it—but it is still a good way to ensure what is called “customer stickiness”. The bank ensures the customer enjoys a greater degree of ease in both browsing for products as well as paying for it. Given online shopping in India is chiefly geared towards the mobile platform, HDFC Bank is also considering a mobile wallet service. It would be interesting, though, to see how the bank actually goes about striking the deals with the e-tail companies, for discounts it hopes will attract shoppers towards its payment services.