Amazon India has received Reserve Bank of India (RBI) approval to launch its own digital wallet. The move is likely to benefit the e-commerce website in several ways, including doing away with the tedious mandatory two-factor authentication for online payments on check-out.
Other benefits for Amazon India include the ability to offer cashbacks to consumers, credited directly to the digital wallet, similar to what Paytm does with its own e-commerce store and wallet. It is also a step up from the company's Amazon Pay service, which was launched last year but was limited to Amazon-only transactions. With the new digital wallet, Amazon could potentially power payments for non-Amazon transactions, giving it a slice of the burgeoning digital payments market in India.
In an emailed statement to Gadgets 360, Sriram Jagannathan, VP Payments, Amazon India said, "We are pleased to receive our PPI (Prepaid Payment Instrument) licence from the RBI. Our focus is providing customers a convenient and trusted cashless payments experience. RBI is on the process of finalising the guidelines for PPIs."
Jagannathan confirmed there are several advantages to using a digital wallet model, including easier KYC and authentication processes.
"We look forward to seeing a continuation of the low limit wallet dispensation with simplified KYC & authentication. This will allow us to help customers adopt digital payments at scale and thereby contribute towards making India a less-cash economy," said Jagannathan.
He also described the recently launched Amazon Pay service, and how it helped boost cashless payments for the e-commerce giant.
"We recently launched Amazon Pay where customers can fund their prepaid balance using Internet banking and credit or debit card for smooth purchases and payments. With this, customers can go cashless and enjoy fast and easy checkouts, quicker refunds coupled with a secured shopping experience only on Amazon.in. We will continue to look for ways to improve customer experience and increasing digital payments leveraging our PPI licence," added Jagannathan.
To recall, the e-commerce giant last year quietly rebranded its Gift Card balance as Amazon Pay touting it as the fastest way to pay. It was essentially the same as gift card balance though unlike wallets, there were no limits on how much anyone can transact in a day.
Jagannathan added that Amazon is looking forward to further cashless innovations from the Indian government. "We hope the government and RBI would continue to encourage multiple ways to shift consumers from cash behaviour by recognising the value of digital wallets, used especially for making small value payments to large merchants like ecom, government, IRCTC, utility or insurance companies," he said.
Medianama reports that the licence was granted to Amazon Online Distribution Services Private Limited on March 22 this year, and is valid till March 31, 2022.
Disclosure: Paytm's parent company One97 is an investor in NDTV's Gadgets 360.