BENGALURU: In a move aimed at building its presence in the payments space, Amazon’s India arm has applied for a semi-closed wallet licence with the RBI, sources directly aware of the development told TOI. A central bank committee is expected to review new applications next month. If its application goes through, sources said, Amazon would look to open up the wallet for third-party platforms as well.
A semi-closed wallet allows users to buy products/services from merchants which have a specific arrangement with the payments company. A closed wallet can only be used with one particular merchant. An open wallet allows payments and cash withdrawal, and does not require specific tie-ups with merchants.
When contacted by TOI, an Amazon India spokesperson said in an emailed response, “A trusted, easy, convenient and friction-free payment experience has always been one of Amazon’s key pillars, globally and in India. We are driven by customer demands and seek every opportunity to do what it takes so that our customers benefit. We cannot comment specifically on what we may or may not do.”
Amazon plans to launch the digital wallet by mid-year but much will depend on RBI’s nod, a person who familiar with the matter said. There have been media reports of Amazon looking to acquire payments companies to rev up this business. Former Citibanker Sriraman Jagannathan, who joined Amazon India earlier this year to head the etailer’s payments business, is expected to helm the digital wallet vertical, a report in The Economic Times said last week.
Amazon has applied for the wallet licence under Amazon Online Distribution Services (AODS), a subsidiary of Amazon Asia Pacific Resources incorporated on July 4, 2011. In September last year, AODS had started offering payments logistics and services, allowing merchants to sell through their own websites using Pay With Amazon. At the end of the last financial year, the entity had a revenue of little over Rs 3 lakh while it recorded losses over Rs 2 crore owing to higher other expenses, according to documents filed with the Registrar of Companies. The Amazon India marketplace is run by Amazon Seller Services.
Amazon’s move comes at a time when all major etailers have launched their own wallets to build a larger payments business. Amazon India’s arch rival Flipkart recently launched Flipkart Money, while cab aggregator Ola offers Ola Money for its consumers. Alibaba-backed Paytm and Snapdeal-owned Freecharge have been offering their own wallets for a while now. Mobikwik, Citrus Pay and Oxigen are among the other independent wallets in the domestic market.
Last month, Amazon India acquired Noida-based payments gateway firm Emvantage to strengthen payments on its platform. Amazon is looking to first get the RBI nod before exploring options that could boost its tech for the payments business, sources added. Amazon India has been aggressive in the domestic market, having invested over Rs 6,700 crore since January 2015. Its revenue grew six times to Rs 1,022 crore in financial year ended March 2015, while it incurred losses of over Rs 1,723 crore during the period.
Source: Times of India