3 min read.Updated: 29 Aug 2018, 06:11 PM ISTAnirban Sen
Amazon Pay's Tapzo acquisition is seen as a move to bolster its digital payments business against the likes of Google Pay, Paytm, Flipkart's PhonePe and WhatsApp's payment service
Amazon Pay India, Amazon India’s payments arm, has acquired Bengaluru-based app aggregator Tapzo to ramp up its digital payments business in the country amid increased competition from rivals. Amazon Pay India picked up Tapzo in a cash-and-stock deal valuing the company at $30-40 million, according to two people aware of the development.
Sequoia-backed Tapzo has so far raised over $20 million from Sequoia Capital and American Express Co., among others, since it was founded in 2009 by Ankur Singla, Vishal Pal Chaudhury, Avinash Vankadaru, and Vishrut Chalsani. According to of the people mentioned above, the talks with Amazon had started in early 2018.
An Amazon spokesperson, did not confirm the Tapzo acquisition, but said the company “remained focused on building its digital payments business in India. Our commitment to the vision of a less-cash India remains the same. Our goal is to make it easier than ever before for customers to make digital payments by improving customer experience, affordability and daily routines."
Singla did not respond to requests for comment.
Tech news site Entrackr reported the story first on Tuesday.
Amazon today also zlaunched a new bill payments service, which will enable prepaid and postpaid bill payments on the Amazon Pay platform. As part of the new service, the company has tied up with hundreds of billers for electricity, mobile and broadband bill payments, among others.
The news of Amazon acquiring Tapzo comes after India’s largest digital payment services provider Paytm, owned by One97 Communications Ltd, announced that it had raised an undisclosed amount from Warren Buffett-owned Berkshire Hathaway Inc.
On Tuesday, Google also announced it was partnering with four Indian banks—HDFC Bank Ltd, ICICI Bank Ltd, Kotak Mahindra Bank Ltd and Federal Bank Ltd—to offer instant, pre-approved loans to customers “right within Google Pay in a matter of seconds".
Over the past two years, Amazon has been aggressively investing in building its payments business in India and has invested in several payments and fintech startups to boost its own offerings.
Earlier this year, it had invested $22 million in digital lending firm Capital Float and followed it up by a $12 million infusion into digital insurance start-up Acko. In May, Mint reported that Amazon had backed digital payments start-up TTag.
Over the past 12 months, Amazon has infused capital into its payments arm a number of times, as it looks to gain a bigger chunk of India’s booming digital payments ecosystem, which is currently dominated by Paytm. According to filings with the ministry of corporate affairs, Amazon has increased its authorised capital for Amazon Pay India to ₹ 2,000 crore (roughly $305 million) from ₹ 400 crore.
Mint reported in October last year that Amazon India was preparing to increase investment in its own payments arm by at least five times.
Amazon’s payments business has seen significant growth over the past year. The number of digital transactions on Amazon India have doubled, while the share of digital payments for Amazon India grew from 48% to 60% in 2017.
In December 2016, Amazon launched its Pay Balance service to boost cashless transactions. In July last year, Amazon, which had applied for a Prepaid Payment Instrument (PPI) licence, received the licence from the Reserve Bank of India (RBI).
Owned and operated by Coraza Technologies Pvt. Ltd, the start-up was launched as a complaint redressal forum called Akosha, but was re-launched later as Helpchat, a personal assistant platform with chatting feature. Eventually, it was pivoted as Tapzo in November 2016.
In its current avatar, Tapzo allows users to access over 35 apps, including Flipkart, Amazon, Uber and Ola. As part of the deal with Amazon, Singla and his team at Tapzo will join the online retailer.