Ecommerce giant Amazon
has infused Rs 260 crore into its payments arm Amazon Pay, as the company looks to push its wallet beyond its marketplace to other online merchants and take on Flipkart's PhonePe and Paytm
The latest infusion came from Singapore-based Amazon Corporate Holdings and its US-based parent Amazon, according to Registrar of Companies (RoC) filings. The resolution for the infusion was passed on September 22.
Amazon had until now pumped in over Rs 350 crore into the payments business. Amazon had recently increased its authorised capital for Amazon Pay to Rs 2,000 crore from Rs 400 crore, indicating an aggressive push to its payments arm as it looks to compete with Flipkart's PhonePe and Paytm. The company had said in the RoC filings that it was “in need of funds for expansion of business operations.“
The latest infusion comes in the light of rival Flipkart announcing a commitment of half-a-billion dollars to its payments arm PhonePe. The first tranche of around $180-200 million is expected to come into PhonePe by December-January .
This adds to the $75 million worth of infusion Flipkart has made in PhonePe since the acquisition last year. Paytm raised $1.4 billion from SoftBank earlier this year.
However, the recent guidelines for mobile wallets issued by the Reserve Bank of India has put the ease of use of wallets into question, since companies will now have to do full KYC for customers, which is likely to shoot up costs.
“A concern is that, even the low usage wallets with limited merchant transaction functionality, are required to do a 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,“ Sriram Jagannathan, vice-president (payments), Amazon India had said in a statement following the issue of guidelines.
Amazon received the licence to operate a prepaid payment instrument from the RBI earlier this year. The company announced earlier this week it would allow its customers to use Amazon Pay balance account for booking tickets across BookMyShow platforms.