Competition in online payments in India is fierce! Amazon invests $30 million in Amazon Pay in India

US e-commerce giant Amazon has reportedly infused Rs 2.25 billion ($30 million) into its Indian payments arm Amazon Pay to further expand into the country's booming online payments sector.

With this funding, Amazon Pay has raised a total of Rs 450 crore from its parent company this year . Amazon India had pumped Rs 270.5 crore ( $369 million ) into its payments unit last year .

The investment will give two-year-old Amazon Pay a boost in India’s already crowded digital payments market, which includes Paytm, Google Pay and others.   Pay, PhonePe and BharatPe.

Digital payments in India have surged since last year , when a two-month lockdown in the world's second-most populous country changed consumer behavior , forcing people to buy products online and pay digitally.

Last October, the Indian government-backed payment ecosystem UPI (Unified Payments Interface) became one of the most used digital payment mechanisms in India due to its ease of use . After UPI surpassed 1 billion transactions for the first time , it has maintained a steady growth trend .

Although there are more than half a dozen payment apps in the country, facilitating online transactions is not a revenue generation model for these companies. In an effort to promote digital payments, the Indian government in 2019 removed payment charges, also known as MDR (Merchant Discount Rate), to encourage merchants to accept digital payments.

Currently, all fintech companies in India are using the UPI payment ecosystem to attract customers and businesses to cross-sell other financial products such as micro loans, working capital loans and insurance products. Paytm, PhonePe and Google Pay, among other companies that have accumulated millions of users on their platforms, already offer the above financial products.

Amazon said last month that it had signed up nearly 5 million merchants for Amazon Pay , which offers a buy now, pay later option for users shopping on the app as part of its fintech offering .

However, Amazon Pay does not yet offer credit services to small and medium-sized enterprises, a service that its competitors are counting on to generate revenue.

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India

Digital Payments