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Amazon India injects US $ 40 mn in Amazon Pay

Amazon India has invested Rs. 260 crores (around $40M), in its online payments platform Amazon Pay. This was done using money from Amazon Corporate Holdings based in Singapore and from their parent Company Amazon (US).

Big ticket investment in mobile wallets coupled with stricter government regulations is therefore the current industry trend.

This pumping of funds follows their previous total investment of Rs. 350 crores (around $52.6M dollars). It is a big step up for Amazon India’s payments arm. This brings it in competition with Paytm and Flipkart’s PhonePe.

As per filings at the Registrar of Companies, the new funds will be used to expand the company’s business operations. The authorised capital for Amazon Pay was recently increased to Rs.2,000 crore (around $300.6 M) from 400 crore rupees (around $60.1M) revealing Amazon’s plans for their payments arm. Flipkart has also recently expanded their PhonePe services through huge investments.

The Reserve Bank of India recently issued new guidelines on the use of all mobile wallets which mandates companies to conduct Know Your Customer (KYC) checks, however, this could drive up costs for mobile wallet services — including Amazon Pay.

Sriram Jagannathan, Vice President of Amazon India, shares, “A concern is that even low usage wallets with limited merchant transaction functionality are required to be in compliance with KYC beyond 12 months. This adds friction to customers and costs to the issuer. In line with international guidelines a framework of proportional KYC could have been adopted.”

 
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