Amazon Pay Expanding its Business in India
2018-12-04 15:22 Tuesday
The digital payment market in India is ascendant, projected to grow to $1 trillion by 2023, with abundant opportunities for payment platforms, retailers and financial institutions.
Paytm, PhonePe, and Google Pay remain dominant, with WhatsApp Pay stuck in regulatory limbo.
Amazon launched Amazon Pay Balance in December 2016, which functions as a digital wallet but can only conduct transactions within the Amazon platform. The ecommerce giant dabbled in the Indian fintech space beginning in December 2014 with a $10 million investment in an Indian gift card technology and retail startup, QwikCilver Solutions, which has since been merged into Amazon Pay.
To gain a foothold in the growing Indian market, Amazon invested $5 million in Bengaluru-based digital payments company ToneTag in June 2018. ToneTag isreportedly planning to roll out new payment models for Amazon in the coming months.
Amazon recently announced another round of investment in its digital payments arm— Amazon Pay, an additional $30.35 million, on top of an earlier investment of $81.29 million. Amazon aims to offer cash back promotions to customers during the busy holiday season.
Due to these developments, the proportion of digital transactions on Amazon India has soared to 75%.
"In terms of the total value of payments on our platform during those few days, three-fourths of the transactions happened digitally, which is 10 percentage points higher than last year," said Vikas Bansal, an executive at Amazon Pay. "Further, on our EMI payment option, we saw 70% of adoption in smaller towns and cities."
To date, Amazon has invested nearly $35 million in advertising and promotions, more than double last year's total. Amazon Pay's also increased its revenue by 5100% in the 2017-18 fiscal year.
An executive at Amazon Pay explained the company's vision: "Amazon Pay was a key initiative to shift customer behavior from cash to digital means for their payments both on and off Amazon."