E-commerce behemoth Amazon is reportedly planning to launch a standalone app for its digital payments service, Amazon Pay, in India. According to media reports, Amazon has been contemplating this idea for over a year and is now preparing to proceed with the plan in the coming months.
Amazon Pay was introduced as an in-house digital payments solution integrated into Amazon’s main shopping app in India. Its primary purpose was to simplify transactions for Amazon users, making it easier for customers to pay for their purchases on the platform. Over time, the service expanded beyond the realm of e-commerce and began offering a broader range of financial services. Today, Amazon Pay allows users to send money, pay utility bills, purchase insurance policies, book travel tickets, and even invest in mutual funds and digital gold.
However, despite these diverse offerings, Amazon Pay has struggled to gain a significant market share in India. This is partly due to the fact that it is embedded within the company’s e-commerce platform, which means that many users may not be fully aware of its capabilities. As a result, Amazon Pay remains underutilized compared to its competitors, and this lack of visibility has prompted Amazon to consider a separate app.
One of the primary reasons behind Amazon’s decision to consider a standalone app for Amazon Pay is the growing belief among company executives that the payment service is not receiving the attention it deserves within the main shopping app. Currently, Amazon Pay ranks sixth among digital payment platforms in India based on Unified Payments Interface (UPI) transactions. The UPI system is the most widely used payments network in the country, handling billions of transactions each month. In July 2024, Amazon Pay processed around 72.4 million transactions, which accounted for approximately 0.5% of the total UPI transactions during that period. In contrast, the market leaders, Walmart-owned PhonePe and Google Pay, handled 6.9 billion and 5.3 billion transactions, respectively, in the same month.
India’s digital payments ecosystem is one of the fastest-growing in the world, driven by the rapid adoption of smartphones, increasing internet penetration, and government initiatives aimed at promoting financial inclusion. The market is highly competitive, with several players vying for dominance in the UPI space. As of now, PhonePe and Google Pay lead the market by a wide margin, while other players such as Paytm and BHIM also have a significant presence. As such, by decoupling Amazon Pay from its main shopping app, Amazon can design the new app specifically for financial transactions, allowing it to introduce new features and improvements tailored to the needs of its users.
Amazon Pay’s sixth-place ranking indicates that it has yet to establish itself as a serious contender in this crowded field. However, the company remains committed to growing its payments business in India. In June 2024, Amazon injected INR 600 crore (approximately $72 million) into Amazon Pay India, bringing its total investment in the entity to nearly ₹1,950 crore. In addition to the potential launch of a standalone app, Amazon Pay India has been exploring other avenues to enhance its offerings. For instance, the company received authorization from the Reserve Bank of India (RBI) to operate as a payment aggregator and holds a prepaid payment instrument (PPI) license. Furthermore, Amazon Pay is reportedly working with the National Payments Corporation of India (NPCI) to roll out credit services through the UPI network as well.
