Amazon Pay to get fresh fund infusion from Amazon India2 min read . Updated: 04 Oct 2017, 08:27 AM IST
Amazon India is preparing to increase its investment in Amazon Pay India by at least five times to Rs2,000 crore from Rs400 crore
Bengaluru: Months after getting the go-ahead from the Reserve Bank of India to expand the scope of its digital payments business, Amazon India is preparing to make a big push into digital payments and compete aggressively with the likes of Paytm, Freecharge and e-commerce arch-rival Flipkart’s payment business PhonePe.
According to filings with the ministry of corporate affairs, Amazon India is preparing to increase its investment in its own payments arm by at least five times. Amazon has increased its authorized capital for Amazon Pay India Pvt. Ltd to Rs2,000 crore (roughly $305 million) from Rs400 crore, according to the regulatory filings.
“The company is in need of funds for the expansion of business operations. Therefore, it is necessary to increase the authorized equity share capital to accommodate future funds requirements," Amazon said in the filings.
“Keeping in view the future funding needs of the company, it would be prudent to increase the authorized equity share capital adequately to be in line with the capital requirements of the company," Amazon added.
Over the past six months, Amazon has infused capital into its payments arm at least twice, as it looks to gain a bigger chunk of India’s booming digital payments ecosystem. In May, Amazon pumped in Rs67 crore into the payments arm, while in July, it poured in Rs130 crore into the business.
According to executives at Amazon India, the investments into the digital payments arm are likely to increase over the next 6-12 months.
An Amazon spokesperson said, “Our focus is to make digital payments the most trusted, convenient and rewarding choice for customers. We continue to explore ways to do this, in partnership with banks, processors, fin-tech companies and ecosystem partners. We remain committed to our India business with a long-term perspective to make digital payments a habit for Indian customers and to invest in the necessary technology and infrastructure to grow the entire ecosystem."
In an interview earlier this year, Amazon India chief Amit Agarwal had indicated that the company was gearing up to expand the scope of its digital payments business in India, but did not specify what shape the payments service would take in the coming months.
In December last year, Amazon had launched its Pay Balance service in order to boost cashless transactions. While Pay Balance works in a similar manner to other mobile wallet services, it was restricted to transactions on Amazon.
In July, Amazon India, which had applied for what is called a Prepaid Payment Instrument (PPI) licence nearly a year ago, received the licence from the RBI.
Amazon’s latest moves to gain a slice of the digital payments pie in India comes at a time when investor interest in the sector is at an all-time high. Given India’s status as the world’s last remaining unconquered Internet economy, marquee investors led by the likes of SoftBank Group Corp. and Tencent Holdings Ltd have all bet billions of dollars on the digital payments space in India and backed start-ups such as Paytm.
Flipkart is also spending millions of dollars expanding its own payments business PhonePe. In September last year, PhonePe launched an app based on the Unified Payments Interface (UPI) platform, which was a key bet for Flipkart given how payments are still largely an unsolved problem in both online and offline commerce.