Earlier this this year, Amazon stated that its objective is to make India its second-biggest market in the world after the US. Realizing this the world’s biggest e-commerce firm has just secured a license to launch a digital wallet, which levels the playing field with two of its regional e-commerce competitors, Flipkart and Paytm, both of whom already have digital wallets of their own.
In March, Flipkart had launched an online wallet — Flipkart Money, to counter Alibaba-backed Paytm and Snapdeal’s Freecharge. And now that Snapdeal is close to get acquired by Flipkart, tha later will get an edge in terms of market share that it will get after getting Freecharge post Snapdeal acquisition.
Besides Flipkart Money, the company also has one more e-wallet called PhonePe which it acquired last year. And post recent funding of $1.4 billion, Flipkart had already proposed to invest major part of this money, including with Microsoft, in PhonePe and fintech considering opportunities in online money transfer segment.
Amazon’s soon-to-be-release digital wallet has gotten a license at a time when there is regulatory uncertainty around wallets in India as the Reserve Bank of India has a consultation which appears to be enforcing fairly stringent norms on the operations of wallets. One of a requirement worth noting is that a wallet company need to submit a list of all its merchant partners to the escrow bank.
Amazon knows the importance of India, and has already poured 5 billion into the market, and launched Amazon Prime and Amazon Video. And if reports are to be believed India might soon see Amazon’s brick and mortar stores, as the retail giant recently asked for Indian’s government’s approval to undertake retail trading of food products.
E-commerce players are increasing their focus on digital payments oe E-Wallets with Amazon acquisition of payments platform Emvantage in 2016, while Snapdeal bought Freecharge in 2015. Others like cab aggregator services Ola, too, launched its own wallet — Ola Money, last year.