Info-tech

Amazon receives RBI approval for e-wallet

Sangeetha Chengappa Bengaluru | Updated on January 15, 2018 Published on April 12, 2017

Amazon India has received the RBI’s approval for an e-wallet, which the e-tailer had applied for early last year.

The licence has been issued to Amazon Online Distribution Services on March 22, and is valid for five years.

With this development, Amazon.in can now extend its payment experience to online shoppers which it had enabled in the first month of demonetisation with the launch of Amazon Pay Balance in December 2016.

Pay Balance is a closed wallet that runs on Amazon and offers an easy and convenient one-click payment system compared with the two-factor authentication system that is prevalent in India. With Pay Balance, customers can fund their pre-paid balance using internet banking, credit/debit card using two-factor authentication, and thereafter, go cashless on Amazon.in.

Confirming the development, Sriram Jagannathan, Vice-President – Payments, Amazon India, said in a statement: “We are pleased to receive our PPI (Prepaid Payment Instruments) licence from the RBI. Our focus is providing customers a convenient and trusted cashless payments experience. The RBI is on the process of finalising the guidelines for PPIs. We look forward to seeing a continuation of the low-limit wallet dispensation with simplified KYC and authentication. This will allow us to help customers adopt digital payments at scale, and thereby contribute towards making India a cash-less economy.”

The e-wallet approval comes as the e-tailer plans to woo customers big time to shop on Amazon.in. Internal focus is intensifying on doling out extra discounts to online shoppers who are Amazon Prime members and use Pay Balance.

With the e-wallet licence that will most likely be linked to Pay Balance, Amazon will now be able to compete with existing wallet holders such as Flipkart’s PhonePe, Paytm and FreeCharge.

A strategic advantage

Will this offer Amazon.in a distinct advantage over its competitors with more customer loyalty and added market share? “The wallet will provide more of an incremental impact for Amazon in the near term and will not swing its market share or increase customer stickiness in a big way,” said Anil Kumar, CEO, RedSeer Consulting. However in the long term, it will provide Amazon with a strategic advantage as loyal customers will move towards smoother transactions on the platform for added ease and convenience, he said.

Even Paytm’s wallet adoption witnessed a sharp rise only after demonetisation, and PhonePe has managed to garner 5 per cent of Flipkart’s total transactions so far. An independent wallet will take time to show an impact on Amazon’s transactions, said an analyst.

Published on April 12, 2017
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