While Flipkart has acquired Walmart’s B2B business to power its wholesale play, Amazon’s digital payments venture Amazon Pay has entered the insurance distribution business by partnering with Mumbai-based motor insurance provider Acko General Insurance. The development is in alignment with Amazon Pay’s plans to become a full-fledged financial services platform.
Currently, its services include card payments, UPI payments, e-wallet services and co-branded credit card with ICICI Bank. Last October, Amazon also integrated Amazon Pay with Alexa to allow users to make digital payments through voice commands. The feature allows users to make payments across categories such as electricity, water, post-paid mobile, cooking gas, broadband, DTH and more, like any other digital payments platform.
Amazon has assured that it will offer competitively priced products on both the standardised third-party and own-damage motor insurance policies, claiming that customers can get their vehicles insured within two minutes. Other value-added services include three-day assured claim servicing and a one-year repair warranty in select cities.
Amazon Pay India director and head of financial services Vikas Bansal and Acko’s CEO Varun Dua have assured that the products will be competitively priced and easy to buy. Dua has added that the tie up will also reduce dealership commissions and bring scale. Previously, Amazon had partnered with Acko to offer insurance to its sellers.
Notably, Amazon is an investor in Acko since 2018, along with Flipkart cofounder Binny Bansal, Baring Private Equity Partners India, Ventureast, Kabir Misra-led RPS Ventures, Intact Ventures Inc, Accel, SAIF, TechPro Ventures and others.
Amazon Also Keeps Its Eyes At Ecommerce Play
Amazon Indian had announced its plans to set up 10 new fulfilment centres across several cities to cater to the surge in demand for online buying that’s usually seen during the festive season.
Besides this, the company will also be expanding seven of its existing fulfilment centres to increase its warehousing capacity by 20% to 32 Mn cubic feet, with a total floor area spanning 8 Mn square feet. With this, Amazon will have 60 fulfilment centres spread across 15 states.
Akhil Saxena, VP of Customer Fulfilment Operations, APAC, MENA and LATAM at Amazon “The increase in storage capacity is in line with our long-term commitment to invest in India… With the expanded network of more than 60 fulfilment centers, we look forward to creating thousands of job opportunities with competitive pay.”
Digital Payments Look To Enter Insurance Domain
Offering insurance services has become the next step for digital payments giants in order to boost their services and bring a sort of monetisation to their otherwise free services. Payment has been eyeing the insurance services ever since its first partnership with insurance companies like ICICI Prudential Life, Religare Health, Reliance Life and Reliance General in 2015.
As of March 2020, Paytm has partnered with 20 insurance companies and is now planning to get an additional 30 companies over the next few weeks. The digital payments giant is also looking to enter the segment directly by doing away with the corporate agency licence for brokerage licence. Brokers are intermediaries between prospective customers and providers, whereas a corporate agent is just selling policies on behalf of the insurance provider.
Another payments giant PhonePe, which is owned by Walmart and is Flipkart’s sister company, also partnered with Bajaj Allianz General Insurance to offer Corona Care insurance policy for those who have tested positive for Covid-19 and hospitalised.
Even Amazon’s biggest rival Flipkart hasn’t been away from the sector completely. The homegrown ecommerce platform partnered with Aegon Life to sell life insurance plans with Covid-19 cover on the online marketplace, in May 2020. The insurance plan will cover hospitalisation expenses of up to INR 1 Lakh.