Walmart-owned Flipkart is developing a video Know Your Customer (KYC) solution to offer instant credit to customers who buy through its platform. This came after Aadhaar-based eKYC for private entities was struck down by the Supreme Court the previous year.
The e-commerce major had disclosed its plans around the lending segment last year, however the plans had not materialised since then. It had earlier worked with smaller fintech partners to enable ‘cardless credit’ and checkout finance. The company is now looking to develop its technology and tap into the growing Indian fintech market.
Presently, flipkart is pilot testing the video-based KYC process with around 10,000 customers, according to a media report. The company is awaiting approval from RBI and will then extend the service to more customers.
“I think applying for an NBFC licence is a natural progression to enable credit for our customers and we’re committed to moving in that direction,” said Ranjith Boyanapalli, Vice President – Fintech and Payments, Flipkart, without actually specifying whether it had applied for a non-banking finance company licence from the Reserve Bank of India.
Flipkart has already given loans to 1.2 million customers through its partners. Flipkart is now looking to further develop its proprietary credit underwriting model which will operate mainly by using its own customer data.
Flipkart had announced its plans to foray into the lending space and had applied for an NBFC (Non Banking Financial Company) licence in July 2018, to focus on consumer lending.
“The company will drive credit adoption in three main ways. We will work with partners, in some cases we will use shared data and in some cases we will want to go solo, the ultimate aim is to increase affordability for the customer,” Boyanapalli added.
The plans come at a time when a report by BCG predicts that the Indian digital lending market has the potential to become a $1 Tn opportunity in the next five years.
Some of the notable players dominating the online lending space in India are Zestmoney, Lendingkart, FlexiLoans, KredX, Capital Float and MoneyTap.