Amazon’s move towards payment space, applies for e-wallet licence

Amazon’s move towards payment space, applies for e-wallet licence
The Siliconreview
16 March, 2016

Online shopping giant ‘Amazon’ in an aim to build its presence in the payments space has applied for a semi-closed wallet licence with the RBI. 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.

An Amazon India spokesperson in an email said, “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 e-tailer’s payments business, is expected to helm the digital wallet vertical.

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.

The proposed move of Amazon came at a time when all major e-tailers 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.