Reserve Bank of India recently gave Amazon India a digital wallet license. And now Amazon is in plans to propel its savings and keep hold of its customers taking on its rivals Alibaba’s Paytm and Flipkart’s PhonePe.
The US merchant is taking efforts to make the shopping on its platform, offline payments, pay for utilities, and buy rail and bus tickets through its digital wallet available for its customers. This step by Amazon will probably make it a rival for Paytm and Flipkart’s PhonePe, other than FreeCharge.
All these three retail giants are gaming on the payments space in order to attract and retain the increasing online shoppers’ base in India. Alibaba started using digital wallets in order to dominate the China e-commerce market.
Flipkart’s PhonePe makes use of the UPI (Unified Payment Interface), the peer-to-peer payment technology platform allowing users transact digitally with a mobile phone. Flipkart is in plans to highly invest in PhonePe contributing from its $1.4 Billion fund it raised from Microsoft, Tencent, and eBay earlier this week.
Sriram Jagannathan, VP Payments, Amazon India showed his happiness of receiving their PPI license from the RBI. He further mentioned that the company is now focusing on providing its customers a trusted and expedient cashless payments experience. It is also further expecting a continuation of the low-limit wallet privilege along with easy-to-use KYC and authentication. RBI is further in the finalizing process of the guidelines for PPIs.
The company further stated that this step will allow them to aid its customers use scaled digital payments. Until now, Amazon implemented Amazon Pay—a closed mobile wallet that was usable on its portal only. Nevertheless, similar to MobiKwik, Paytm and other wallets, Amazon’s wallet will be used at other places too.
A digital wallet will further help Amazon and other rivals to trim down costs associated with handling cash—the major payment method in India for e-commerce companies.
At present, there are near by 350 Million users in India making use of mobile wallet and the average transaction amount is between Rs 50 and Rs 4,000.
What do you think? Will Amazon beat down its rivals with its digital wallet license?