Ecommerce giant Amazon has yet again invested $42.6 Mn (INR 300 Cr) in fresh funding in its digital payments arm Amazon Pay. This latest funding comes right after reports stated that Amazon Pay is rolling out doorstep know-your-customer (KYC) services for its mobile wallet users in line with the Supreme Court’s Aadhaar verdict.
This round of funding comes in after the parent company had announced an investment of $30.35 Mn (INR 220 Cr) in the online payment services in November, 2018. It had also pumped in $83.8 Mn ( INR 590 Cr) in October.
Further, in July 2018, Singapore-based Amazon Corporate Holdings and Amazon.com, Inc invested $33.5 Mn (INR 230 Cr) in Amazon Pay.
As of November, Amazon Pay had received nearly $258.7 Mn (INR 1,820 Cr) from its parent entity since 2016.
Amazon’s Focus On Indian Digital Payments Market
According to reports, the company made the new investments in order to step up its competition from the homegrown fintech service providers such as Paytm and PhonePe.
In order to strengthen its foothold in the country, Amazon Pay India Head Mahendra Nerurkar had said that the company will continue to invest in its digital payments arm over the next several months.
Recently, reports also stated that Amazon has begun a closed user group testing of its UPI Pay platform this week.
Earlier in September 2018, Amazon India rolled out its Amazon Pay EMI service for users who do not own a credit card. The service allows the customers to purchase high priced item from Amazon by getting a credit of up to $852 (INR 60K).
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.
Growth Of Digital Payment Market In India
The central government’s digital payments system, Unified Payments Interface (UPI) had ended the year of 2018 by recording over 620 Mn transactions in December marking an 18% increase from November. With this, the total number of transactions that took place on UPI, last year, stood at 3 Bn.
In August 2018, Flipkart had infused $64.1 Mn (INR 451 Cr) in its digital payments arm, PhonePe. In order to get ahead of its rivals, PhonePe also launched its own wealth management unit, PhonePe Wealth Services.
In November, homegrown fintech platform Paytm had claimed to be the largest contributor to the volume of UPI payments in India, recording a growth of 600% in transactions in the last six months. Recently, it also got approval from the Reserve Bank of India (RBI) to restart opening new accounts for its consumers.
According to a report by Niti Aayog titled, Digital Payments – Trends, Issues and Opportunities, the Indian digital payment industry is expected to grow to reach $1 Tn (INR 70 Lakh Cr) by 2023.
Aiming to boost this growth further, the RBI has also constituted a five-member committee named ‘High-Level Committee for Deepening of Digital Payments” which will be led by Nandan Nilekani, former chairman of Unique Identification Authority of India (UIDAI).
The group will be responsible for looking at the existing status of digital payments in the country, identify the problems and gaps and suggest solutions to rectify them.
[The development was reported by ET]