Amazon Strengthens Its Fintech Arm in India

In a bold move to solidify its position in India's competitive digital payments landscape, Amazon has injected Rs 350 crore into Amazon Pay India. This strategic investment aims to challenge the dominance of PhonePe and Google Pay in the region.

The Competitive Landscape

With rival Flipkart's Super.money seeking $35-40 million in new funding, the fintech space in India is heating up. Amazon Pay India's recent capital infusion through a rights issue highlights the company's commitment to growth, despite slipping to eighth place in UPI transaction volume.

Market Position and Future Prospects

Despite holding a modest 0.6% market share in UPI transactions, Amazon Pay is exploring new growth avenues, including merchant payments, following its approval for a payment aggregator licence by the Reserve Bank of India.

Financial Performance and Strategic Partnerships

Amazon Pay India reported a 9.22% increase in operating revenue to Rs 2,286 crore for FY24, alongside a 39% reduction in losses. The platform has also expanded its services through partnerships with leading platforms in ticketing, travel, and wealth management.

Industry Calls for Sustainable Digital Payment Models

The Payments Council of India advocates for the reintroduction of the merchant discount rate for UPI and RuPay transactions to ensure the sustainability of digital payment providers, a move supported by Amazon Pay India's CEO.