Amazon Pay offers an entire range of financial services which includes payments, credit and insurance. However, it is still not part of the payments leaderboard in India. To get back into the leadership game in consumer payments, e-commerce giant Amazon’s digital payments arm is reportedly counting on the traditional mobile wallet business. According to a report by The Economic Times, after allowing interoperability in its wallets, the company is hoping to get transactions back on track.
What is Amazon Pay Wallet interoperability?
With this new function, Amazon Pay wallet users will be able to scan any QR code in the country. The company also noted that more mobile wallets are being activated every day, but users are not using these wallets to make transactions.
Amazon Pay users are not using wallets
As per RBI’s data, in April 2023, Amazon Pay created 62.8 million wallets but they cumulatively reported only 3.8 million transactions that month. The number of wallets has gone up by 14% from 55 million in 2022. However, the transactions reported on the wallets have reduced by over 50% from around 8 million in April 2022.
To compare, Paytm Payments Bank has more than 500 million wallets. Amazon Pay is also lagging behind the competition on Unified Payments Interface (UPI)-based transactions as well. NPCI data notes that Amazon Pay reported 57 million transactions in May 2023 and the number has been fairly stable over the last year or so.
How Amazon Pay is planning to win back customers
By tapping the 100 million plus registered users in India in its e-commerce business, Amazon wants more users to utilise the payment platform. The company wants users to access Amazon Pay for bill payments, train ticket bookings and other daily transactions.
“We are behind in the race in terms of share of transactions, but we have a large customer base and it is just about how we get them to use it and build a habit around it,” said Vikas Bansal, whole-time director, Amazon Pay India.
He also added that the discoverability of the platform has been an issue as the payment platform is integrated into the larger e-commerce app,
To address this issue, Amazon has built a shortcut that can take users directly from the home screen into the Amazon Pay micro app. Bansal hopes that this change will help boost adoption, yet the company is still not convinced about having a separate app for the payment platform.
“That (separate app) is something we continue to debate internally—there are pros and cons. But we have one question in mind: how far are we able to solve the problems for our customers? And if it means that we need another app, then maybe we will,” Bansal said.
Amazon’s plans for mobile wallets
Bansal noted that over 70% of daily UPI transactions are payments of a value of less than Rs 500. To keep their bank accounts clean, several customers prefer to use a wallet for such transactions and Amazon is planning to appeal to this set of users.
Apart from Google, the other two tech majors—Meta-owned WhatsApp and Amazon—have both lagged in the consumer payments business. WhatsApp Pay’s failure has also seen its entire top India leadership leave, the report adds.
Amazon Pay’s plans about credit and insurance options
Unlike other payment apps, Amazon Pay started offering credit and insurance options much earlier. The company’s payment arm got the corporate agency licence back in 2019.
Amazon Pay’s insurance business has not scaled up significantly, but the credit business has seen some progress. Bansal said that more than 10 million customers have been offered credit on the platform. The two major products offered by the platform are ICICI Bank-Amazon Pay credit cards and a buy-now-pay-later line for online purchases. Around 3 million ICICI Bank-Amazon Pay credit cards have been issued as of March 2022.
Bansal noted that this card gets used a lot even outside the Amazon ecosystem. With active rates of more than 65 to 70%, this card is one of the most successful co-branded cards in the market, he added. Active rate is the number of people who use their cards more than once a month. However, Amazon did not share any details on the number of credit lines or the amount outstanding in this business.
Offline channels and call centres still sell insurance very aggressively in India. Bansal mentioned that the insurance industry still needs time to mature and settle down. An entity like Amazon will be able to sell these products on a mass scale, through online channels only after the market is settled and mature. Currently, Amazon collaborates with Acko to offer motor insurance products.
What is Amazon Pay Wallet interoperability?
With this new function, Amazon Pay wallet users will be able to scan any QR code in the country. The company also noted that more mobile wallets are being activated every day, but users are not using these wallets to make transactions.
Amazon Pay users are not using wallets
As per RBI’s data, in April 2023, Amazon Pay created 62.8 million wallets but they cumulatively reported only 3.8 million transactions that month. The number of wallets has gone up by 14% from 55 million in 2022. However, the transactions reported on the wallets have reduced by over 50% from around 8 million in April 2022.
To compare, Paytm Payments Bank has more than 500 million wallets. Amazon Pay is also lagging behind the competition on Unified Payments Interface (UPI)-based transactions as well. NPCI data notes that Amazon Pay reported 57 million transactions in May 2023 and the number has been fairly stable over the last year or so.
How Amazon Pay is planning to win back customers
By tapping the 100 million plus registered users in India in its e-commerce business, Amazon wants more users to utilise the payment platform. The company wants users to access Amazon Pay for bill payments, train ticket bookings and other daily transactions.
“We are behind in the race in terms of share of transactions, but we have a large customer base and it is just about how we get them to use it and build a habit around it,” said Vikas Bansal, whole-time director, Amazon Pay India.
He also added that the discoverability of the platform has been an issue as the payment platform is integrated into the larger e-commerce app,
To address this issue, Amazon has built a shortcut that can take users directly from the home screen into the Amazon Pay micro app. Bansal hopes that this change will help boost adoption, yet the company is still not convinced about having a separate app for the payment platform.
“That (separate app) is something we continue to debate internally—there are pros and cons. But we have one question in mind: how far are we able to solve the problems for our customers? And if it means that we need another app, then maybe we will,” Bansal said.
Amazon’s plans for mobile wallets
Bansal noted that over 70% of daily UPI transactions are payments of a value of less than Rs 500. To keep their bank accounts clean, several customers prefer to use a wallet for such transactions and Amazon is planning to appeal to this set of users.
Apart from Google, the other two tech majors—Meta-owned WhatsApp and Amazon—have both lagged in the consumer payments business. WhatsApp Pay’s failure has also seen its entire top India leadership leave, the report adds.
Amazon Pay’s plans about credit and insurance options
Unlike other payment apps, Amazon Pay started offering credit and insurance options much earlier. The company’s payment arm got the corporate agency licence back in 2019.
Amazon Pay’s insurance business has not scaled up significantly, but the credit business has seen some progress. Bansal said that more than 10 million customers have been offered credit on the platform. The two major products offered by the platform are ICICI Bank-Amazon Pay credit cards and a buy-now-pay-later line for online purchases. Around 3 million ICICI Bank-Amazon Pay credit cards have been issued as of March 2022.
Bansal noted that this card gets used a lot even outside the Amazon ecosystem. With active rates of more than 65 to 70%, this card is one of the most successful co-branded cards in the market, he added. Active rate is the number of people who use their cards more than once a month. However, Amazon did not share any details on the number of credit lines or the amount outstanding in this business.
Offline channels and call centres still sell insurance very aggressively in India. Bansal mentioned that the insurance industry still needs time to mature and settle down. An entity like Amazon will be able to sell these products on a mass scale, through online channels only after the market is settled and mature. Currently, Amazon collaborates with Acko to offer motor insurance products.
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