Amazon Plans Standalone Amazon Pay App in India to Boost Usage
Amazon is reportedly looking to launch a standalone app for its Amazon Pay service in India, in a bid to increase its usage in the country. The move comes as Amazon Pay is currently integrated within the main Amazon e-commerce app in India, providing various services such as money transfers, bill payments, and investments in mutual funds and digital gold.
The decision to separate Amazon Pay from the e-commerce app has been in consideration for about a year, and Amazon has already sought approval from the NPCI to move forward with this plan. It is believed that Amazon Pay is not receiving enough attention within the e-commerce app, and creating a dedicated app could potentially improve its recognition in India.
However, there are cautionary notes that Amazon, given the challenges it faces in India, may still alter or abandon this plan. Currently, Amazon Pay ranks sixth among apps on the Unified Payments Interface (UPI), processing approximately 72.4 million transactions in July, which accounts for only 0.5% of all transactions on the network. In contrast, Walmart’s PhonePe and Google Pay have processed significantly larger volumes.
This strategy mirrors that of Amazon's main rival, Flipkart, which has also consolidated its fintech offerings into one vertical, signaling a shift away from superapp strategies, a trend observed in India.
Experts note that despite Amazon Pay's relatively low market share, especially in comparison to its competitors, the company sees significant opportunities in smaller towns and offline payments in India. Digital payments in tier two and three cities have surged, closing the gap with larger metros, which could represent a key growth area for Amazon Pay.
However, industry watchers caution that Amazon faces significant challenges in scaling up its payments business in India, where the market is fiercely competitive. Amazon's plan to launch a standalone app could still be adjusted or even scrapped depending on market conditions.
Key Takeaways
- Amazon is considering launching a standalone Amazon Pay app in India to enhance its usage and visibility.
- Amazon Pay currently exists within the e-commerce app, offering diverse financial services.
- The objective is to provide Amazon Pay with more visibility and focus.
- Amazon Pay holds the sixth position in UPI transactions, processing 72.4 million transactions in July.
- Amazon's decision may change due to the numerous challenges it faces in India.
Analysis
The possible separation of Amazon Pay in India is aimed at improving its market visibility and focus, driven by a perceived underutilization within the e-commerce app. This move could lead to heightened competition with dominant players like PhonePe and Google Pay, potentially impacting their market shares and strategies. While Amazon Pay's current transaction volume suggests limited immediate impact, the long-term benefits may include increased user engagement and service diversification. Regulatory approvals and market dynamics remain crucial, with the potential to alter Amazon's plans. This shift reflects a broader trend away from superapp models, impacting other tech giants in India's evolving fintech landscape.
Did You Know?
- Unified Payments Interface (UPI):
- Explanation: UPI is an instant real-time payment system developed by the National Payments Corporation of India (NPCI) that facilitates inter-bank transactions. Regulated by the Reserve Bank of India, UPI enables seamless fund transfers between two bank accounts on a mobile platform, allowing users to make direct payments to different merchants through a mobile application or website.
- Digital Gold:
- Explanation: Digital gold offers a digital platform for buying, selling, and storing gold, backed by physical gold of high purity stored in secure vaults by authorized custodians. This form of investment, which allows redemption in physical gold if required, has gained popularity due to its convenience and the opportunity to invest in gold without the need for physical storage.
- Superapp Strategy:
- Explanation: A superapp strategy entails the development of a mobile application that combines various services into a single platform, eliminating the need to switch between different apps. Notable examples include WeChat in China, offering messaging, social media, payments, and more within a single app, aiming to amplify user convenience and engagement.