Boosting Amazon Pay Usage in the Country
Amazon is contemplating decoupling its payments service from the e-commerce app in India and housing it within a standalone app. This move aims to increase the usage of Amazon Pay in the country, which currently ranks sixth among apps on Unified Payments Interface (UPI).
Current State of Amazon Pay
Amazon Pay is currently embedded within the company’s primary e-commerce app in India. The service allows users to transfer money to individuals and merchants, pay bills, purchase insurance and travel tickets, invest in mutual funds and digital gold, and buy travel tickets.
However, some executives at Amazon believe that Amazon Pay does not receive sufficient attention on the e-commerce app. A separate app with a singular focus could help the payments platform gain wider recognition in the country.
Plans to Shift Payments Service
Amazon has been considering this plan for about a year and intends to proceed with it in the coming months. The company has already reached out to the National Payments Corporation of India (NPCI) for approval, but there are concerns that users may have to issue fresh UPI IDs if Amazon proceeds with the plan.
Challenges and Controversies
Some sources familiar with the matter said that Amazon sees the requirement of issuing fresh UPI IDs as a "thorny" one. This has raised questions about whether the company will be able to navigate this challenge successfully.
Additionally, there are concerns about how the shift in payments service will impact users who rely on Amazon Pay for various financial transactions. The uncertainty surrounding this issue may hinder the successful execution of the plan.
Competition and Market Trends
Amazon is not alone in considering similar options in India. Its chief Indian rival, Flipkart, recently consolidated its fintech offerings into one vertical. This move has sparked interest among investors and analysts, who are watching to see how Amazon’s strategy will unfold.
Flipkart has been successful in consolidating its fintech offerings, but the company faces stiff competition from other players like Google Pay and PhonePe. The Indian fintech market is highly competitive, with various companies vying for market share.
Industry Insights
Industry experts believe that the success of Amazon’s plan depends on how well the company executes it. They also point out that a standalone app for payments services can be beneficial in increasing user engagement and conversion rates.
However, others argue that Amazon should focus on improving its existing e-commerce app rather than creating a separate app for payments services.
Conclusion
Amazon’s decision to shift its payments service into a standalone app is a strategic move aimed at boosting the usage of Amazon Pay in India. The company faces challenges in executing this plan, but industry experts believe that it can be successful with proper execution and strategy.
As the Indian fintech market continues to evolve, companies like Amazon and Flipkart are pushing the boundaries of innovation and competition. The outcome of Amazon’s plan will have significant implications for the future of e-commerce and payments services in India.
References
- Amazon Pay ranks sixth among apps on Unified Payments Interface (UPI) in India.
- In July 2023, Amazon Pay processed about 72.4 million transactions, accounting for about 0.5% of all transactions on the network.
- Walmart’s PhonePe processed 6.9 billion transactions, while Google Pay handled 5.3 billion.
Additional Information
Amazon has been operating in India since 2013 and has made significant investments in the country. The company has also launched various initiatives to promote digital payments and financial inclusion in India.
In addition to Amazon Pay, the company offers a range of other services, including Amazon Prime Video, Amazon Fresh, and Amazon Alexa.
