What to know

  • Amazon might just launch Amazon Pay as a separate app in India.
  • The idea is to gain wider recognition and boost usage of Amazon Pay in the country.
  • But several challenges include regulatory approvals and potential user disruption could nip the idea in the bud.

E-commerce giant Amazon is exploring the possibility of separating its payment service, Amazon Pay, from its main shopping app in India. This potential move, which has been under consideration for about a year, could significantly improve its standing in the digital payments landscape in the country.

Currently, Amazon Pay is nestled within the primary Amazon app in India. Amazon Pay offers most of the services offered by other UPI apps, including money transfers, mobile recharge, bill payments, travel ticket purchase, insurance purchase, subscriptions, etc. However, Amazon believes that the payment service isn’t getting the attention it deserves within the e-commerce app.

The rationale behind this potential split is to give Amazon Pay a chance to shine on its own. A dedicated app could help the payment platform gain wider recognition and potentially boost its user base in India’s competitive digital payments market.

However, decoupling Amazon Pay and having it as a separate app is not going to be easy. Obtaining approval from the National Payments Corporation of India (NPCI), which oversees the Unified Payments Interface (UPI) system, is challenge enough. Additionally, Amazon may need to reissue new UPI IDs to users, which could cause some disruption.

Amazon Pay is lagging behind In the current Indian digital payments, ranking sixth among UPI apps. In July, it processed about 72.4 million transactions, accounting for roughly 0.5% of all UPI transactions. This puts it well behind market leaders like Walmart-owned PhonePe and Google Pay.

The potential move by Amazon reflects a broader trend in India’s tech industry. The “superapp” strategy, popular in China, hasn’t seen much success in India. Other companies, like Flipkart, have also been rethinking their approach to fintech offerings.

As Amazon contemplates this significant change, it’s clear that the company is looking to strengthen its position in India’s rapidly evolving digital payments sector. However, with the discussions still ongoing and confidential, Amazon’s plans could still change.

While Amazon declined to comment on what it described as speculation, the tech world will be watching closely to see how this potential move unfolds and what it could mean for the future of digital payments in India.