Amazon Pay, the digital payments arm of ecommerce giant Amazon, has reportedly raised $30 Mn (INR 195 Cr) from its parent entity. The development comes just over five months after Amazon Pay India received a capital infusion of $40 Mn (INR 260 Cr).
The latest capital infusion from Singapore-based Amazon Corporate Holdings Pvt Ltd and the US-based parent Amazon.com, as per filings with the Registrar of Companies (RoC).
The move is aimed at tackling competition from rivals Paytm and Flipkart-owned PhonePe. This is, in fact, in line with the company’s aim to increase its investment in Amazon Pay by up to five times in the coming years.
An email query sent to Amazon’s communication team awaited response till the time of publication.
Earlier, in June 2017, the ecommerce behemoth fuelled a $20 Mn (INR 130 Cr) investment in Amazon Pay India, through Amazon Corporate Holdings Singapore and Amazon.com, Mauritius. This brings Amazon Pay’s total fundraise so far to over $100.45 Mn.
Overall the last few months, the company has been doubling down to bolster its digital payments business in India. To that end, Amazon increased the authorised capital of its payments arm from $61.5 Mn (INR 400 Cr) to $307.7 Mn (INR 2,000 Cr) last year.
Along similar lines, it recently onboarded Mahendra Nerurkar as the new head of Amazon Pay India. Before Nerurkar, the company had hired former Citi banker Sriraman Jagannathan to head its payments business and spearhead the launch of the digital wallet in February 2016.
As per sources in the know, Jagannathan will continue to lead the Amazon Pay Board, focussing on long-term strategy and initiatives.
Recently, former Flipkart senior executive Mayank Jain also joined the company and is currently heading its financial services arm.
Amazon Betting On India’s Growing Digital Payments Sector
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 2016, it announced the acquisition of Noida-based payment gateway EMVANTAGE Payments. The company applied for a semi-closed wallet license with the RBI in March 2016, which it received a year later.
Amazon launched Amazon Pay Balance in December 2016, a payment option similar to how mobile wallets work but limited to transactions within the platform.
In April 2017, the Indian arm of the ecommerce giant 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). Towards the beginning of this year, Amazon India announced that it would allow customers to load cash into their Amazon Pay balance accounts right at their doorstep through its new load cash at doorstep feature.
The new feature addresses the problem of leftover change for customers while paying cash for their cash on delivery orders.
As per an Amazon India spokesperson, Amazon Pay balance (stored value account/wallet) grew YoY by 409% in 2017. More so, the wallet now accounts for 48% of all digital transactions on the platform.
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. While the latest investment in Amazon Pay will help strengthen its presence in the Indian digital payments market, how the RBI’s full-KYC mandate for all prepaid payment instruments (PPIs) users affects its growth remains to be seen.
(The development was reported by ET)