E-commerce giant Amazon is set to enter the digital payments market in India. Last year Amazon had applied for a wallet license and now it has received Reserve Bank of India (RBI) approval to run a Pre-Paid Instrument (PPI), or its own digital wallet. The license has been issued on March 22 and is valid for five years. Amazon has now become one of the 84 companies that the Reserve Bank of India permits to operate payment licenses.
Sriram Jagannathan, Vice-President of Payments, Amazon India, said in a statement: “We are pleased to receive our PPI (Prepaid Payment Instruments) license from the RBI. Our focus is providing customers a convenient and trusted cashless payments experience. The RBI is on 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 cash-less economy.”
Earlier to boost cashless transactions, Amazon had launched its Pay Balance service in December where customers can fund their prepaid balance using internet banking and credit/debit card for smooth purchases and payments but this service was restricted to transactions on its own platform.
In 2014, Amazon had invested in QwickCilver and the mobile wallet of the company runs on PPI license provided to QwickCilver. Even after the launch of Amazon E-wallet, Amazon will continue its partnership with QwickCilver.
Amazon's entry into India's digital payments market comes at an appropriate time. After demonetization in the country, there has been a rapid increase in the transactions on e-wallets. According to RBI data, amount of payments through PPIs rise from Rs 1320 crore in November to Rs 2150 crore in March. The digital payments industry in India is likely to reach $500 by 2020 and digital payments could account for 15% of India's gross domestic product.
Amazon will now be able to take on established players such as Paytm and Freecharge as it prepares to begin a prepaid wallet service.
April 18, 2017