No OTP For Online Payments Up To INR 2K On Flipkart

Walmart-owned Flipkart has partnered with global payments company Visa to integrate Visa Safe Click (VSC), an in-app device-based payment authentication feature.

VSC in Flipkart’s app will help users complete online payments without entering one-time passwords (OTP) for purchases up to INR 2K. Any order above INR 2K will involve the same OTP method as has been prevalent so far.

Flipkart believes that by reducing the number of steps required to complete online transactions, users will face reduced friction in areas with low or bad internet connectivity, which could lead to more orders from rural areas and will also boost digital payment success. Additionally, the company believes it will improve promote digital and financial inclusion.

Ranjith Boyanapalli, head of fintech and payments at Flipkart said that OTP-based authentication has been one of the biggest points of friction in online card transactions and it observed a significant number of customer drop-offs at this point in the journey.

Highlighting that VSC has been developed to tackle fintech challenges in India, Visa group India manager T R Ramachandran said that it eliminates friction and reduces cart abandonment and failures due to password issues.

Flipkart has been conducting a range of fintech experiments. Flipkart is currently in the process of applying for a non-banking financial company (NBFC) license to back up PhonePe. Flipkart’s new entity is likely to be a lending platform for buyers and sellers. The platform will be enabled with a cardless credit, buy-now-pay-later features and checkout finance. In addition, the platform will also reportedly provide working capital loans to sellers, among other things.

In July last year, Flipkart partnered with Axis Bank to launch the co-branded credit card, powered by Mastercard’s payments architecture. Flipkart claimed this improves access to credit for some of its customers, who may not be able to get loans or credit cards from traditional banks.

In January 2018, with Flipkart Pay Later, the company began providing short-term credit for users to pay for the products on the ecommerce platform.

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