Amazon’s eWallet Gets RBI License; Will Now Directly Compete With Paytm, Freecharge & PhonePe
Reserve Bank of India has finally approved Amazon’s digital wallet and provided them with the license to operate a full-scale eWallet. This now puts Amazon in direct competition with existing digital wallets such as Paytm, Freecharge, PhonePe and MobiKwik.
Amazon had applied for Prepaid Payment Instrument (PPI) license last year, which is necessary to operate a digital wallet in India. Meanwhile, in the month of December last year, Amazon decided to launch their wallet called Amazon Pay Balance, which was mainly focussed on transactions happening on Amazon’s e-commerce portal, as the license was still not there.
We had reported that it would be unwise to compare it with PhonePe, which is Flipkart’s own digital wallet, powered by UPI.
Then, in the month of January this year, Amazon decided to expand the scope of their eWallet by partnering with 25 digital services such as Crocs, Sennheiser, Café Coffee Day and others.
Now, as they have received a license to operate full-fledged digital wallet, they will try to push its usage among all sections of digital users, mainly e-commerce shoppers, who can now use a single app for all their activities.
Sriram Jagannathan, vice-president of payments at Amazon India said, “We are pleased to receive our PPI licence from the RBI. Our focus is providing customers with a convenient and trusted cashless payments experience.”
eWallet Rules Too Stringent?
Now, as Amazon has received the license to operate, it has joined the chorus of other digital wallet providers to simplify the rules of licensing, and to make it easier for consumers to use the wallet.
To start with, Amazon, along with other wallet providers are demanding that eKYC process should be made simpler, and seamless.
Sriram said, “RBI is in the process of finalising the guidelines for PPIs. We look forward to seeing a continuation of the low-limit wallet dispensation with simplified KYC (know-your-customer norms) and authentication. This will allow us to help customers adopt digital payments at scale and thereby contribute towards making India a less-cash economy,”
Besides making eKYC process stricter, RBI has also raised the capital required by digital wallet players to 5 times.
Are There Too Many Players Now In eWallet Niche?
After the high of demonetization, digital transactions have been gradually falling in India, and the trend is not encouraging for mobile wallet players.
As we reported in January, digital transactions on mobile wallets decreased by 29% in the month of January, compared to December, as cash withdrawals increased from ATMs. Besides, credit/debit card transactions via PoS machines also fell by 41% as well.
As per recent RBI data, which came early this week, cash usage in India in India has now reached pre demonetization levels, as mobile wallets and other forms of cashless transactions are witnessing a continued dip in usage.
Interestingly, UPI-based transactions are witnessing at an incredible pace right now, even overtaking digital wallets in volume and average transactions.
Will Amazon’s eWallet also incorporate UPI-based transactions? That is the question we all need an answer now, as the future seems a combination of UPI and Aadhaar Pay now.
Do you think Amazon’s eWallet will be able to make a dent in the market? Do let us know by commenting right here!