Amazon Pay is collaborating with the National Payments Corporation of India (NPCI) to introduce credit options for customers on the unified payments interface (UPI).
Vikas Bansal, the whole-time director of Amazon Pay India, emphasized that their objective is to innovate in collaboration with NPCI. Introducing credit on UPI is a significant initiative, and they are actively exploring ways to enhance the customer experience and value proposition.
At present, more than 100 million customers utilize Amazon Pay UPI for various transactions such as shopping, bill payments, online merchant transactions, and sending money to contacts. Amazon provides instant credit via the Amazon Pay Later feature on its platform, allowing customers to buy items on the Amazon marketplace through monthly installments.
In collaboration with financial platforms Axio, IDFC FIRST Bank, and Karur Vysya Bank, Amazon Finance India provides the Buy Now Pay Later option. Amazon Pay Later has attracted 9 million customer registrations and boasts a remarkable payment success rate of 99.9%.
To date, the growth of credit on UPI has been hampered by unclear interchange fee structures and limited uptake among smaller merchants. Bansal believes that Amazon’s extensive network of merchants could address this challenge, suggesting that the merchant discount rate should be structured to incentivize all participants.
He expressed concern that if the MDR is excessively high, it could negatively impact merchants while benefiting banks. Therefore, he suggests structuring it in a manner that provides incentives for all participants in the ecosystem.
Amazon Pay has successfully enlisted over 8.5 million offline merchants in more than 350 cities and towns. Additionally, it is accepted at over 10,000 online merchants, offering a diverse array of services such as cab rides, food delivery, movie and bus ticketing, and travel bookings. Notable merchants include Uber, Zomato, Swiggy, Dominos, and BookMyShow.
Furthermore, Amazon Pay has collaborated with RBL Bank for UPI payments, and ICICI Bank for FASTag recharge, and introduced the Amazon Pay ICICI co-branded credit card.
In February, This Pay obtained a payment aggregator license from the Reserve Bank of India (RBI). Previously, it had also secured approval from the regulator for a prepaid payment instrument license.
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Bansal stated, “Having catered to both customers and merchants for an extended period, this license validates our strategy and approach. We intend to leverage this license to enhance our value proposition further.”
