📱Amazon's Standalone App Strategy
Amazon is contemplating turning Amazon Pay into a standalone app in India, according to sources familiar with the discussions. The company has been considering this move for about a year, aiming to increase Amazon Pay's usage and recognition in the competitive Indian payments market. Currently, Amazon Pay is embedded within the main e-commerce app, handling various transactions such as bill payments, insurance purchases, and money transfers.
💸Challenges and Considerations
Amazon has approached the National Payments Corporation of India (NPCI) for the required approvals. However, one potential hurdle is the need to issue new UPI IDs to users if the service is decoupled. Some executives at Amazon believe that a standalone app could drive more attention to Amazon Pay, which currently ranks sixth on UPI with a modest 0.5% share of transactions in July 2024.
🤔Rival Strategies
Amazon isn’t alone in this strategy. Competitor Flipkart recently consolidated its financial services, though it had previously separated its payments arm, PhonePe. The super app model, which bundles multiple services, has seen mixed results in India. Amazon’s move, if it proceeds, might reshape how digital payments are viewed and utilized by millions in the country.
📊Current Market Position
As of July 2024, Amazon Pay handled about 72.4M transactions on the UPI network. This is significantly lower than PhonePe and Google Pay, which processed 6.9B and 5.3B transactions, respectively. Amazon's shift to a standalone app could be its strategy to close this gap. However, the company is also dealing with multiple challenges in the Indian market, which may impact its decision-making process.
Would you switch to Amazon Pay if it becomes a standalone app?
