Amazon secures digital wallet licence, to take on Paytm, Flipkart's PhonePe

By Karan Choudhury , Business Standard, New Delhi | In Digital | April 13, 2017
  • 66
In the next few months it will get into railways, utilities and insurance payments.

Amazon India has received a payments wallet license from the Reserve Bank of India, as it looks to boost savings and retain customers within is ecosystem as it takes on rivals Flipkart, and Alibaba's Paytm.

The US retailer is looking to allow users to shop on its platform, make offline payments, buy bus and rail tickets and pay for utilities through its digital wallet. This will put the company squarely against Paytm and Flipkart-owned PhonePe, apart from number two player FreeCharge.

All three players are betting on the payments space to engage the growing base on online shoppers in India. Paytm's parent Alibaba, pioneered the use of digital wallets to dominate the e-commerce market in China.

PhonePe uses the Unified Payment Interface (UPI), the peer to peer payment technology platform that allows users with a mobile phone transact digitally. Flipkart is looking to aggressively invest in PhonePe from its $ 1.4 billion kitty it raised earlier this week from Tencent, Microsoft and eBay.

"We are pleased to receive our PPI license from the RBI. Our focus is providing customers a convenient and trusted cashless payments experience. RBI is on the process of finalising the guidelines for PPIs. We look forward to seeing a continuation of the low limit wallet dispensation with simplified KYC & authentication," Sriram Jagannathan, VP Payments, Amazon India.

The company said that this would allow us to help customers adopt digital payments at scale. Amazon, till now operated a closed mobile wallet Amazon Pay which could be used only on its portal. However, now just like Paytm, MobiKwik and other wallets, its wallet could be used in other places as well.

A digital wallet will also allow Amazon and its rivals to reduce costs that comes with handling cash, the largest payment method for e-commerce companies in India.

"We recently launched Amazon Pay where customers can fund their pre-paid balance using internet banking and credit or debit card for smooth purchases and payments. With this, customers can go cashless and enjoy fast and easy checkouts, quicker refunds coupled with a secured shopping experience only on Amazon.in. We will continue to look for ways to improve customer experience and increasing digital payments leveraging our PPI license," added Jagannathan.

Not divulging much, he added that the company hoped the government and RBI would continue to encourage multiple ways to shift consumers from cash behaviour by recognizing mthe value of digital wallets, used especially for making small value payments to large merchants like ecom, government, IRCTC, utility or insurance companies.

Amazon received the PPI license from RBI in last week of March. According to the RBI, the digital payments through the mobile-based national payment system, Unified Payments Interface, increased further in the month of March. UPI-based transactions increased by nearly 20 percent to Rs 2,000 crore in the month of March 2017, as compared to Rs 1,660 crore in the month of January 2017. Out of that almost Rs 1,800 crore of transactions happened via mobile wallets.

There are around 350 million users of mobile wallet users in India and the average transaction size is between Rs 50 to Rs 4,000.

  • 66

© 2017 Business Standard