As the ecommerce giant Amazon gets into offline market as well as digital payments space, the company is bringing the digital touch to offline retail with its scan and pay feature.
With its digital payments subsidiary Amazon Pay, the company is reportedly expanding the scan and pay feature to neighbourhood stores. The company has already enabled the scan and pay feature in department store chain Shoppers Stop and will soon set up the necessary infrastructure at grocery chain More.
It is being speculated that as the company has a stake in Shoppers Stop as well as Aditya Birla’s retail chain More, it will now start reaching out to merchants, which would take more time as it is in the unorganised sector.
An Amazon spokesperson reportedly confirmed the development and said, “We have begun introducing Amazon smile code, a new way for our customers to shop and pay at physical stores like Shoppers Stop, among others. Customers will soon find Amazon smile codes in neighbourhood retail stores, where they can scan and pay for their purchases seamlessly.”
Amazon Pay: Cash Infusions, Continued Growth
Amazon Pay has scaled up significantly last year with features such as EMI options, cash load at doorstep among others. Also, frequent funding from the parent company Amazon has further bolstered the payment arm’s plans to attain a dominant position amid players like Paytm, Google Pay, and PhonePe.
Related Article: Amazon Pay Users Can Now Pay Bills Via Alexa Voice Commands
The continued cash infusions from parent entity has also supported its growth with more than $300 Mn invested in the company since 2016, with latest tranche in January 2019.
In FY17-18, Amazon Pay recorded revenues of $53.18 Mn (INR 393.5 Cr), against $1.09 Mn (INR 7.47 Cr) in the previous year. At the same time, the company’s net loss made 85% of its revenues reaching $45.17 Mn (INR 334.2 Cr). The net loss was a jump of 88% from $24.04(INR 177.88 Cr) for the previous year.
Further, Amazon had also invested $5 Mn (INR 35.1 Cr) in Bengaluru-based digital payments company ToneTag. With this deal, ToneTag has been exploring new payment modes for Amazon.
Digital Payments In India
The online payment sector in India has been recording constant growth with increasing penetration of internet and smartphones. The space is currently dominated by Alibaba-backed Paytm, Flipkart-owned PhonePe and Google-owned GPay.
However, in the offline merchant segment, according to industry estimates, there are around 300K offline, QR-based mobile transactions done daily, most of which are enabled by Paytm, followed by PhonePe and GPay.
For a long time, Paytm via its QR code had been the only player in the merchant segment. In November 2018, it claimed that over 6 Mn of its 9.5 Mn offline merchant base accept Paytm UPI, and they form 80% of all offline merchant transactions conducted on UPI.
At the same time, PhonePe claimed to have its merchant acceptance network across 100 cities, with Walmart recently enabling digital payments via PhonePe app for its Kirana stores. It has plans to increase to 500 by the end of 2019.
In February 2019, Indian government-backed instant real time payment system Unified Payments Interface (UPI) clocked in 674.19 Mn transactions worth INR 1.06 Lakh Cr. With a bigger and deeper penetration of the digital payments industry, the possibility of Amazon’s dominance in the sector is a very bleak prospect as it continues to struggle despite being a heavily invested entity.
[The development was reported by Livemint.]