Amazon Pay plans to offer Credit on UPI

Amazon Pay plans to offer Credit on UPI:

​Amazon Pay is looking to offer credit on unified payments interface (UPI) to customers, and is working with the National Payments Corporation of India (NPCI) for the same.

“One of our stated objectives is to innovate in partnership with NPCI. Credit on UPI is one large initiative. So, we are very actively looking at that to see how we continue to enhance customer experience and value proposition,” Amazon Pay India whole-time director Vikas Bansal said.

Currently, over 100 million customers use Amazon Pay UPI for shopping, paying bills, paying at online merchants, and sending money to their contacts. Amazon offers instant credit through the Amazon Pay Later option on its platform. Here, customers can make purchases on the Amazon marketplace using equated monthly installments.

Amazon Finance India offers Buy Now Pay Later in partnership with financial platform Axio, IDFC FIRST Bank, and Karur Vysya Bank. Amazon Pay Later has garnered 9 million customer sign-ups. The platform has a payment success rate of 99.9%.

So far, credit on UPI volumes have been hindered by a lack of clarity on the interchange fee structure and lower adoption among smaller merchants. With Amazon’s extensive merchant network, Bansal feels that the merchant discount rate should be set in such a way that it provides an incentive to all players.

“If the MDR is too high, the merchant ecosystem will hurt while banks will benefit. So, I think you need to put it in a way that it offers incentives for all players in the ecosystem,” he said.

Over 8.5 million offline merchants have been onboarded as Amazon Pay merchants across more than 350 cities and towns. Amazon Pay is widely accepted at over 10,000 online merchants, covering a wide range of services, including cabs, food delivery, movie ticketing, bus ticketing, and travel bookings, including merchants like Uber, Zomato, Swiggy, Dominos, and BookMyShow.

Additionally, Amazon Pay has partnered with RBL Bank for UPI payments, ICICI Bank for FASTag recharge, as well as the Amazon Pay ICICI co-branded credit card.

In February, Amazon Pay received a payment aggregator licence from the Reserve Bank of India (RBI). Earlier, it had received the regulator’s nod for a prepaid payment instrument licence.

“We have been processing or serving both customers and merchants for a very long time. This licence validates our strategy and approach. We will use the licence to expand our value proposition,” Bansal said.