Amazon Pay Eyes Roll Out Of Credit On UPI In Partnership With NPCI

Amazon Pay is working with the National Payments Corporation of India (NPCI) to roll out credit services to customers through the Unified Payments Interface (UPI).

Amazon Pay India’s whole time director Vikas Bansal told The Financial Express that the company is actively looking at offering credit lines on UPI rails to enhance user experience. 

“One of our stated objectives is to innovate in partnership with NPCI. Credit on UPI is one large initiative. So, we are very actively looking at that to see how we continue to enhance customer experience and value proposition,” Bansal said.

In June last year, the central bank extended the scope of UPI by allowing linking RuPay credit cards with the payments infrastructure. Subsequently, in September last year, the Reserve Bank of India (RBI) also allowed scheduled commercial banks to offer credit lines to their customers over UPI rails. 

Simply put, credit on UPI is modelled after buy-now-pay-later (BNPL) products. It enables users to make payments using the credit line assigned by the bank without having the required balance in the linked accounts/wallets.

The latest development comes barely two months after the RBI accorded authorisation to Amazon’s fintech arm to operate as a payments aggregator (PA). Not just this, Amazon Pay also holds a prepaid payment instrument (PPI) licence, which was granted to the company back in 2017. 

Earlier this month, the RBI also proposed allowing linking PPIs like digital wallets through third-party UPI applications.

Amazon already offers instant credit through its BNPL product called Amazon Pay Later option, which enables customers to make purchases on its marketplace and pay later in monthly instalments.

As per the report, more than 100 Mn customers use Amazon Pay UPI for various transactions. The ecommerce major also claims that Amazon Pay has so far partnered with 8.5 Mn brick-and-mortar sellers and more than 10,000 online sellers.

While Amazon Pay received PA licence just this year, it has struck partnerships with a slew of financial institutions and fintechs to woo new customers and shore up its digital payments offerings. 

While the fintech platform has partnered RBL Bank for UPI payments, it has also tied up with ICICI Bank for FASTag recharges and launched a cobranded credit card. It has also collaborated with the likes of IDFC FIRST Bank, and Karur Vysya Bank to offer BNPL products and has reportedly clocked 9 Mn customer sign ups.

Amazon Pay’s plans to offer credit on UPI comes close on the heels of reports stating that several non-banking financial companies (NBFCs) and fintech startups urged the RBI to allow them to offer credit on UPI, either through credit cards or pre-approved credit lines.

The central bank is yet to take a call on the matter. As per a report, the RBI wants to ensure ‘credit on UPI’ works as a product offering before mass rollout to more players. 

Meanwhile, providing credit on UPI is also likely to help Amazon Pay increase its revenue. Amazon Pay India’s operating revenue reportedly grew a meagre 4% to INR 2,093 Cr in FY23 from INR 1,998 crore in the previous fiscal year. Meanwhile, loss narrowed 13% year-on-year to INR 1,499 Cr during the year under review.