Amazon’s Rs 350 Crore Investment in Amazon Pay India

Context:

Amazon has injected Rs 350 crore into its payments arm, Amazon Pay India, marking its third significant investment into the company in less than a year. This move underscores Amazon’s continued push to strengthen its position in India’s competitive Unified Payments Interface (UPI) market.

Key Details

• Equity Shares Issuance: Amazon Pay issued 3.5 crore equity shares to its parent entities, Amazon Corporate Holdings Pvt Ltd and Amazon.com Inc, through a rights issue.
• Previous Investments: This follows Rs 600 crore in June 2024 and Rs 300 crore in November 2024, showcasing a consistent effort to consolidate Amazon Pay’s position in the digital payments space.

Competitive Landscape of the UPI Market

• Market Leaders: According to NPCI data, PhonePe and Google Pay dominate the UPI space with a combined market share of nearly 85%.
• Amazon Pay’s Market Share: Despite its significant investment, Amazon Pay holds only about 0.6% of the market, highlighting the challenges new entrants face in breaking established user habits and platform loyalty.
• Rising Competition: Flipkart-backed Super.money is also ramping up its fintech offerings, planning to raise capital, further intensifying competition in the sector.

Amazon Pay’s Regulatory Progress

• In February 2024, Amazon Pay secured a payment aggregator (PA) licence from the Reserve Bank of India (RBI), enabling it to handle merchant transactions more effectively.
• Additionally, it received approval for a prepaid payment instrument (PPI), which broadens its scope for offering a wider array of financial services.