2 minutes read
The boom of e-wallets is constantly increasing after the announcement of demonetization period in the country. They are many Unified Payments Interface (UPI) platforms in the country like Paytm, Freecharge and others. And many more are there in pipeline. After ruling the e-commerce sector, Amazon is launching their e-wallet in India which will be known as Amazon Pay. World’s largest e-commerce company Amazon.com has secured a license from the Reserve Bank of India (RBI) to operate a Prepaid Payment Instrument (PPI). With this, Amazon India has become the 84th company which is authorized by the Reserve Bank of India to operate payment licenses. Amazon Online Distribution Services Private Limited (ADOS) which is a subsidiary of Amazon Asia Pacific Resources has issued the license on 22nd of March 2017 and is valid till 31st of March 2022.
In December, Amazon had launched its ‘Pay Balance’ service in order to boost cashless transactions. While Pay Balance works in a similar manner to other mobile wallet services, it was restricted to transactions on Amazon. And hence the organization decided to launch an e-wallet with broader scope. The e-wallet approval comes as the retailer plans to woo customers big time to shop on Amazon.in. Internal focus is intensifying on doling out extra discounts to online shoppers who are Amazon Prime members and use Pay Balance. Amazon’s new wallet service will look to address a vital problem in the world of payments — like other wallet services such as Paytm, it will help customers bypass the two-step authentication process for online payments using credit or debit cards and makes the process smoother for online shoppers, thus plugging a key gap in the payments process that reduces the risk of loss of business from online shoppers.
With the e-wallet license that will most likely be linked to Pay Balance, Amazon will now be able to compete with existing wallet holders such as Flipkart’s PhonePe, Paytm and FreeCharge. Confirming the development, Sriram Jagannathan, Vice-President – Payments, Amazon India, said in a statement: “We are pleased to receive our PPI (Prepaid Payment Instruments) license from the RBI. Our focus is providing customers a convenient and trusted cashless payments experience. The RBI is on the process of finalizing the guidelines for PPIs. We look forward to seeing a continuation of the low-limit wallet dispensation with simplified KYC and authentication. This will allow us to help customers adopt digital payments at scale, and thereby contribute towards making India cash-less economy.” The wallet will provide more of an incremental impact for Amazon in the near term. However in the long term, it will provide Amazon with a strategic advantage as loyal customers will move towards smoother transactions on the platform for added ease and convenience.