Amazon Gets Wallet License From RBI
From ecommerce to entertainment to grocery and now to wallets! One of the world's largest Online marketplace Amazon India has secured a licence to operate a pre-paid payment instrument (PPI) which is also known as digital wallet, joining the ranks of Paytm, Flipkart & Snapdeal that have their own payments affiliates. As per the RBI website, The Reserve Bank of India has issued the licence, effective as on March 22, in the name of Amazon Online Distribution Pvt Ltd Services.
This levels the playing field for Amazon India with Flipkart, Paytm & Snapdeal. While Paytm's parent company has a payments bank licence and an ewallet with multiple offline use cases, Snapdeal has already acquired digital wallet FreeCharge and Flipkart-owned PhonePe which has has leveraged its integration with the government-backed Unified Payments Interface to push transactions through the platform. Flipkart acquired PhonePe last year (April-2016) to minimize hurdles around payments and bolster its ecommerce business. Similarly, the now-struggling Snapdeal, had acquired mobile wallet FreeCharge in September 2015 to boost commerce on the platform. Gurgaon-based online marketplace, ShopClues has also acquired Bengaluru-based mobile payments startup Momoe Technologies July-2016 to bring innovative digital payments for its merchants and customers on its platform.
Sriram Jagannathan, Vice President, Payments, Amazon India, stated, “We are pleased to receive our PPI license from the RBI. Our focus is providing customers a convenient and trusted cashless payments experience. RBI is in the process of finalizing 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 less cash economy.”
As a per a recent 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. Digital payments in India have exploded after the Prime Minister’s demonetization move November last year, which forced many users to switch to digital payments to tide over shortage of cash.
Instant Messaging app WhatsApp is the latest entrant and is expected to launch a peer-to-peer payment system in India. Similarly, Sweden-based Truecaller, which counts India as its largest market, also introduced a new UPI-based mobile payment service ‘Truecaller Pay’ last month in an association with ICICI Bank.
Currently, Amazon Pay runs on the PPI licence issued to reward points management and gift card provider Qwikcilver, in which Amazon invested $10 million in 2014. The licence now issued to the marketplace is valid till March 31, 2022.
I'm writing this article after reading a report published on The Economics time. To get more updates on subjects like follow me on Twitter. My Twiter handle is @amarthakur
#Ecommerce #Payments #Amazon #Flipkart #Paytm #Snapdeal #RBI #Digital