The Development Comes Weeks After Ecommerce Rival Flipkart Committed $500 Mn To Its Payments Business, PhonePe
Amazon has reportedly pumped $40 Mn (INR 260 Cr) into its digital payments arm, Amazon Pay. The move, aimed at tackling competition from rivals Paytm and Flipkart-owned PhonePe, comes only three months after the ecommerce behemoth invested $20 Mn in Amazon Pay India.
Singapore-based Amazon Corporate Holdings Singapore and the US-based parent Amazon.com have infused the new capital, as per filings with the Registrar of Companies. A recent report states that the company had approved the resolution on September 22, 2017.
Till date, Amazon has poured more than $53.8 Mn (INR 350 Cr) into its payments business. According to sources, the Indian arm of the global ecommerce behemoth is looking to increase its investment in Amazon Pay by up to five times.
As per the company’s MCA filings, Amazon has already increased the authorised capital of its payments arm from $61.5 Mn (INR 400 Cr) to $307.7 Mn (INR 2,000 Cr) in the last couple of months.
At the time, a spokesperson from Amazon stated, “The company is in need of funds for the expansion of business operations. Therefore, it is necessary to increase the authorized equity share capital to accommodate future funds requirements. Keeping in view the future funding needs of the company, it would be prudent to increase the authorized equity share capital adequately to be in line with the capital requirements of the company.”
Amazon’s increased efforts to push Amazon Pay comes at a time when rival Flipkart has committed $500 Mn to its group company, the UPI app PhonePe. Prior to that, in August, the digital payments subsidiary reportedly raised $38.7 Mn from the online marketplace.
Amazon Betting On The Indian Fintech Wave With Amazon Pay
The ecommerce giant began attempting to enter the Indian fintech space in December 2014, with an investment of about $10 Mn in Bengaluru-based gift card technology and retail startup, QwikCilver Solutions.QwikCliver powered the e-gift cards for transactions on the ecommerce marketplace. As of now, it has also merged e-gift cards into Amazon Pay.
In February 2016, it hired former Citi banker Sriraman Jagannathan to head its payments business, to spearhead the launch of the digital wallet. This was followed by the acquisition of Noida-based payment gateway EMVANTAGE Payments. The company had applied for a semi-closed wallet license with the RBI in March 2016, which it received a year later.
The company launched Amazon Pay Balance in December 2016, a payment option similar to how mobile wallets work but limited to Amazon-based transactions.
In April 2017, the Indian arm of the ecommerce company secured the licence from the Reserve Bank of India (RBI) to operate a prepaid payment instrument (PPI). As per the RBI website, Amazon Online Distribution Services Pvt. Ltd secured the licence late last month. This makes the ecommerce behemoth the latest entrant in the country’s booming digital payments space.
A month later, in May, the digital wallet platform reportedly received $10.45 Mn (INR 67 Cr) from Amazon Capital Holdings and Amazon.com Inc. Ltd, Mauritius.
As a per a report by Google and Boston Consulting Group, the digital payments industry in India is projected to reach $500 Bn by 2020, contributing 15% to India’s GDP. The latest investment from its ecommerce parent will likely give Amazon Pay the push it needs to get ahead of the competition.
(The development was reported by ET)
