ONDC weeks away from launching investments, insurance, credit

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There is a financial leviathan around the corner that might prove to be a game-changer almost in the same manner as UPI. Following up on its foray into fashion, grocery, electronics, food and travel, the Open Network for Digital Commerce (ONDC) is only weeks away from expanding its footprint in the domain of investments, insurance and credit, the Business Standard has reported. It has already started offering gift cards.

The services that are supposed to go live in a few weeks have evinced keen interest in more than 65 entities that want to join the network as technology service providers and institutions that want to offer buyer/seller applications. And more than 20 companies have initiated integration with the platform. The companies that have begun integration with the platform feature among others include Tata Digital, Aditya Birla Finance, Karnataka Bank, India Lends, Easy Pay and DMI Finance. ONDC acts as a middleman in the world of online shopping, connecting buyers and sellers. It works on an open protocol and offers itself to business entities that want to enhance their reach and network through network-enabled application. ONDC has been supported with funds from giants such as SBI, HDFC Bank, Kotak Mahindra Bank, BSE Investments and NSDL. “In credit, ONDC is starting with personal loans and GST-based loans to individuals and sole proprietors, respectively. The API (application programming interface) draft specifications for the same were released in early August for market feedback,” read an official response from ONDC to an e-mail sent by the newspaper. Insurance is one of the thrust areas and ONDC is kicking off with health insurance, vehicle insurance and marine insurance. The investment journey will be launched with offerings in mutual funds on the network.

For both insurance and MFs, the API specifications investments will be released in the next few weeks. MF Utilities India is collaborating with ONDC to tie up with asset management companies. The MFs offerings might come as early as early October.

The report stated that at the beginning commission-paying regular MF schemes might be the first ones to be offered. Most online MF distribution platforms offer to customers commission-free direct investment plans.

“Technology integration is underway. As stated by ONDC, API specifications for MF will be released soon. If things go according to the plan, MFs can go live on the ONDC platform in the next couple months,” said Ganesh Ram, managing director and chief executive officer of MFU.

ONDC has already launched an “ONDC network gift card” which is targeted at corporate gifting and employee engagement purposes. RuPay network has collaborated with ONDC for the gift card. It can carry a maximum amount of Rs 10,000. YES Bank and OmniCard have become the first two issuers of the gift card. A few other banks fintech platforms are waiting to join, ONDC revealed.

Gift cards that are connected with more than 100 brands in different product categories have also been launched in August with Spice Money as the buyer application. Vistaar (Earnest Data Analytics Private Ltd) is the seller application in this matter.

Since inception by Department of Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce in December 2021, ONDC has so far served 1.2 crore orders, most of which has originated in the mobility domain. Food comprises 65-70% of the retail orders. It can now boast of 1.5 lakh merchants and presence in 180 cities.