India's Digital Wallets Space Has a New Kid on The Block. Oh Wait! A New Boss Maybe
American e-tailer giant Amazon has been batting well in India since 2013.
After giving neck-breaking competition to India’s biggest ecommerce company Flipkart, Amazon is set to compete with India’s innovative digital wallet players.
Biggest among them are the Alibaba-backed Paytm, investor Kunal Bahl-backed Freecharge, Mobikwik and Oxigen. A consolidation to beat bigger rivals led to Citrus Pay’s buyout by PayU, another player in the space.
Earlier this year, Amazon bought Noida-based payments services provider Emvantage, and its subsidiary Amazon Online Distribution Services has now has finally received a PPI licence from India’s central bank to launch its e-wallet.
At a time when digital wallet companies are eyeing payments to go up to 35-40 percent of total transactions in the economy, Amazon’s e-wallet will mark the company’s entry into India’s fast-growing digital payments business and may prove to rough competition for existing players. Amazon is expected to use its online payment portal Amazon Pay to launch all digital payments operations.
PPI or prepaid payment instruments are methods that facilitate purchase of goods and services against the value stored on such instruments. The value stored on such instruments represents the value paid for by the holder, by cash, by debit to a bank account, or by credit card.
In a statement, Sriram Jagannathan, VP - Payments, Amazon India said the company’s focus is providing customers a convenient and trusted cashless payments experience.
“We look forward to seeing a continuation of the low-limit wallet dispensation with simplified KYC (know-your-customer norms) and authentication. This will allow us to help customers adopt digital payments at scale and thereby contribute towards making India a less-cash economy,” Jagannathan said.
The Reserve Bank of India recently released guidelines on issuance of PPI licences in its bid to ramp up online security of mobile wallets and win consumer trust. According to the central bank’s requirement, minimum capital by wallet operators has been raised and stricter Know-Your-Customer regulation has been proposed.
Amazon’s rival Flipkart also launched its e-wallet Flipkart Money earlier this month.
Last month, Amazon India Chief Amit Agarwal called for need to care about giving customers a great experience. “India needs laser-focus on customer needs and innovations that are sustainable,” Agarwal said at the ET GBS Summit held in New Delhi.
He reiterated that Amazon’s India division was incorporated in India and followed all mandated laws including two-factor authentication and paying service tax.
Amazon has spent nearly $1 billion on its India operations and has committed to invest at least $5 billion in the coming years to expand in the country.