Amazon has been sitting pretty as the undisputed global king of ecommerce for more than two decades, and the multinational’s bold move into the payments sector has been relatively smooth. Since its quiet launch in 2014, the Amazon Pay mobile wallet has established itself as a strong and reliable competitor in the mobile payments space.
Amazon Pay currently only serves about 33m users to Apple Pay’s worldwide base of 87m. Yet over the course of 2017, Amazon has been working to advance its market position through a series of major investments – and a huge chunk of that investment has been directed at the increasingly competitive and incredibly lucrative Indian payments market.
Last spring, the Reserve Bank of India granted Amazon permission to set up shop in the country as India’s 84th approved payments provider. The company has since wasted no time rolling out a multi-tiered Amazon Pay mobile accounts system, with filings indicating Amazon has increased its payments investment in the country almost five-fold over the last twelve months.
This week, Amazon Pay made another giant bid to gain market ground after announcing the launch of a new bill payments facility that will allow Indian users to pay for all of their electricity, telephone, broadband and other utilities using their Amazon Pay mobile wallet. The ecommerce giant has struck deals with more than 100 Indian billers including Vodafone, Tata Power, BSES, BSNL, Airtel, ACT, Reliance Jio and BESCOM to provide direct mobile payment services.
Meanwhile, Amazon Pay users in India can now benefit from the ability to use their app balances to pay for mobile recharges, settle credit card bills and spend directly at a number of participating merchants and retailers, including the incredibly popular food delivery platform Swiggy. But striking new partnerships with existing merchants and enhanced product delivery are only two aspects of Amazon Pay’s apparent strategy to conquer India.
Earlier this week, reports surfaced that Amazon Pay has also made a successful bid to acquire the Sequoia-backed Indian start-up Tapzo. The cash and stock deal values the Bengaluru-based contactless provider at up to $45m, and the acquisition should help Amazon to tackle a crucial market segment of consumers characterised as being unable or unwilling to adopt the company’s mobile wallet products.
Amazon’s big 2018 push to make ground in India places the company at loggerheads with Chinese giant Alibaba – which not only lays claim to the world’s second-largest mobile payments company in the form of Alipay, but is also a major shareholder in the Indian digital wallet provider Paytm. Paytm already claims a highly significant market share at 230m users, 50% of which are dotted throughout rural India.
But Alibaba won’t be the only multinational Amazon is set to be competing with across the Indian payments sector. The Walmart-backed ecommerce giant Flipkart has its own mobile payments app in the form of PhonePE, which is one of India’s longest-established unified payments interface providers. Elsewhere, Google has recently pushed into India with the NPCI-developed Google Tez app – which was rebranded at the end of August to sit under the increasingly formidable Google Pay brand.