Amazon India has acquired an approval from the Reserve Bank (RBI) to operate a prepaid instrument / digital wallet.
Amazon Online Distribution Services (AODS), a subsidiary of Amazon Asia Pacific Resources, was awarded the license on March 22. The license is valid till the end of fiscal year 2022.
The development comes at a time when the digital payments space is witnessing a high level of engagement by leading internet-based startups in the country. Amazon invested Rs 150 crore in AODS last year with the objective of participating in this space. TOI had reported in March last year that the Seattle-based e-commerce major had applied for a wallet license.
Amazon’s top rival, Flipkart, also has ambitious plans for its payments business under the PhonePe brand. Flipkart Group CEO Binny Bansal had told TOI in an interview on Tuesday that a significant part of the company’s latest $1.4 billion fund raise will be deployed towards PhonePe.
The RBI approval for Amazon sets the stage for a fierce competition between the company and Flipkart in the payments business too.
Since the beginning of 2017, Amazon has been promoting Amazon Pay, which allows users to pay online on the marketplace – it makes the check-in and check-out process simple by using information already stored in the Amazon account. In the past few sale events, Amazon offered incentives to customers using Amazon Pay in order to expand the user base.
“We are pleased to receive our PPI (prepaid payment instrument) license from the RBI. Our focus is providing customers a convenient and trusted cashless payments experience. RBI is in the process of finalising the guidelines for PPIs. We look forward to seeing a continuation of the low limit wallet dispensation with simplified KYC & authentication. This will allow us to help customers adopt digital payments at scale and thereby contribute towards making India a less cash economy,” said Sriram Jagannathan, VP-payments, Amazon India. Amazon brought in Jagannathan, who was previously with Bharti Airtel and IDFC Bank, last year to prepare the blue print for the payments business.
At present, Alibaba-backed Paytm is the largest wallet player in India. Other smaller players include Mobikwik and Freecharge.
Originally published in http://timesofindia.indiatimes.com/companies/amazon-india-receives-rbi-approval-for-digital-wallet/articleshow/58157557.cms