The Open Network for Digital Commerce (ONDC) has successfully tested personal loan transactions with Easypay and DMI Finance in January 2024, paving the way for further innovations in the financial services sector. This achievement comes amid ONDC’s continued growth, witnessing over 1 lakh daily transactions in retail and ride-hailing, a year after its entry into hyperlocal commerce.
ONDC is actively building infrastructure for credit, insurance, and wealth management, with key players like Aditya Birla Capital, Tata Capital, and Bajaj Finserv in various stages of integration. A significant focus for ONDC is facilitating loan transactions for small business owners, with plans to launch a GST invoice-based financing product aimed at simplifying financial processes.
ONDC plans to collaborate with buyer-side applications to standardise data formats, enabling lenders and insurers to streamline customer targeting and facilitating seamless financial product purchases.While 85 firms have expressed interest in the credit segment, the pilot phase includes participants like Easypay, Paynearby, and Tata Digital on the buyer side, and lenders such as DMI Finance, Aditya Birla Finance, and Karnataka Bank.
Expansion into Insurance
ONDC is set to launch motor, health, and marine insurance in the next 6-8 weeks, collaborating with Insurance Dekho, Policybazaar, and Cliniq 360 among others. Sachet marine insurance products are also in the works to support smaller sellers. In the wealth management segment, ONDC is partnering with MF Utilities to make sachet mutual fund investments accessible to the economically underserved, with transactions expected to commence by April 2024.
Government-Backed Initiative
Backed by the government, ONDC aims to disrupt the dominance of major platforms like Amazon and Flipkart in e-commerce. It aspires to reach 900 million buyers and 1.2 million sellers, targeting a gross merchandise value of $48 billion and increasing e-commerce penetration to 25% within the next two years.
ONDC’s strides in testing new transactions and expanding its services underscore its pivotal role in reshaping the digital commerce landscape. As it pioneers innovations in financial services, the government-backed initiative sets the stage for a more inclusive and competitive e-commerce environment in India.
