HT TECH wants to start sending you push notifications. Click allow to subscribe

Amazon adds insurance, gold to its list of financial services in India

In India where it has over 100 million registered users, Amazon is better placed to use financial services to win subscribers to its annual $13 Prime plan which offers faster shipping and music and video streaming. 

By: REUTERS
Updated on: Aug 20 2022, 22:53 IST
The company aspires to make Amazon Pay the country's payment method of choice, said Mahendra Nerurkar, head of Amazon Pay in India, which has signed up 4 million merchants. (REUTERS)
The company aspires to make Amazon Pay the country's payment method of choice, said Mahendra Nerurkar, head of Amazon Pay in India, which has signed up 4 million merchants. (REUTERS)

Amazon.com has added insurance and even gold to its menu of financial services in India, to expand its customer base and attract more subscribers to its Prime loyalty programme in a battleground growth market.

The push ramps up competition as financial technology (fin-tech) rivals and their deep-pocketed foreign backers struggle for profitability in a predominantly cash-based economy where about 190 million adults do not have bank accounts.

You may be interested in

Mobiles Tablets Laptops
7% OFF
Apple iPhone 15 Pro Max
  • Black Titanium
  • 8 GB RAM
  • 256 GB Storage
₹148,900₹159,900
Buy now
23% OFF
Samsung Galaxy S23 Ultra 5G
  • Green
  • 12 GB RAM
  • 256 GB Storage
₹115,999₹149,999
Buy now
Google Pixel 8 Pro
  • Obsidian
  • 12 GB RAM
  • 128 GB Storage
₹106,998
Check details
Apple iPhone 15 Plus
  • Black
  • 6 GB RAM
  • 128 GB Storage
₹87,900
Check details
21% OFF
Acer Swift Go SFG14 41 NX KG3SI 002 Laptop
  • Pure Silver
  • 8 GB RAM
  • 512 GB SSD
₹58,999₹74,999
Buy now
41% OFF
Acer Aspire 5 A515 57G Laptop
  • Gray
  • 16 GB RAM
  • 512 GB SSD
₹52,990₹89,999
Buy now
22% OFF
Acer Aspire 3 A315 24 NX KDESI 004 Laptop
  • Silver
  • 8 GB RAM
  • 512 GB SSD
₹33,499₹42,999
Buy now
40% OFF
Asus VivoBook 15 X515JA BQ322WS Laptop
  • Transparent Silver
  • 8 GB RAM
  • 512 GB SSD
₹31,350₹51,990
Buy now
35% OFF
Xiaomi Pad 6
  • Mist Blue
  • 6 GB RAM
  • 128 GB Storage
₹25,999₹39,999
Buy now
55% OFF
Lenovo Tab M10 5G
  • Abyss Blue
  • 6 GB RAM
  • 128 GB Storage
₹20,999₹47,000
Buy now
32% OFF
Realme Pad 2
  • Imagination Grey
  • 6 GB RAM
  • 128 GB Storage
₹19,689₹28,999
Buy now
Honor Pad X9
  • Gray
  • 4 GB RAM
  • 128 GB Storage
₹14,999
Check details

To boost online payments, Amazon launched its Amazon Pay digital wallet in 2016. It has since introduced a credit card, signed up to a state-backed payments network, and processes payments for movie and flight tickets as well as telephone and utility bills.

It began offering auto insurance in July and gold investment products in August - both a first for Amazon.

Its US fin-tech efforts have been modest by comparison, stymied in part by merchant reluctance to use services offered by their biggest retail rival.

In India, however, where it has over 100 million registered users, Amazon is better placed to use financial services to win subscribers to its annual $13 Prime plan which offers faster shipping and music and video streaming, tech executives said.

To that end, the company aspires to make Amazon Pay the country's payment method of choice, said Mahendra Nerurkar, head of Amazon Pay in India, which has signed up 4 million merchants.

"Apparently Chinese fashion designers are leaving the back pockets off jeans because no one uses them anymore (for wallets)," Nerurkar told Reuters. "We would love to make that happen in India."

India's digital payment market is set to more than double in value to $135 billion by 2023 from 2019, showed a study by professional services firm PwC and Indian lobby group ASSOCHAM.

Thin-margin business

A ban on high-value currency notes in late 2016 amplified a digital payment drive in India, with Amazon joined in the sphere by Alphabet Inc's Google, Walmart Inc's PhonePe, and Paytm, backed by SoftBank Group Corp.

Later prospective entrants have faced tougher regulatory scrutiny. Facebook Inc's WhatsApp, which boasts over 400 million users in India, has been awaiting approval to offer payment services for over two years as regulators wrestle with new data-localisation rules.

Yet for incumbents, profit has been elusive. Paytm, also backed by Alibaba Group Holding Ltd, has booked losses running into the hundreds of millions of dollars. PhonePe has said it hopes to turn profitable by 2022.

Indeed, profit margins in the digital payments business are generally thin, so to make money, Amazon may have to rely on services such as lending and insurance, industry watchers said.

"It is likely that the next step for Amazon would be to distribute exchange-traded funds and mutual funds," said Niren Shah, India head of Silicon Valley firm Norwest Venture Partners.

Others said Amazon's sheer muscle does not necessarily mean it can succeed in a market as huge and complex as India.

"It's not going to be easy to win over the Indian fin-tech market," said a person who declined to be identified due to a business relationship with Amazon. "It's competitive and varied, so it's going to be a slow process."

Catch all the Latest Tech News, Mobile News, Laptop News, Gaming news, Wearables News , How To News, also keep up with us on ,Twitter, Facebook, , and Instagram. For our latest videos, subscribe to our YouTube channel.

First Published Date: 02 Sep, 12:03 IST

Sale

Mobiles Tablets Laptops
4% OFF
Samsung Galaxy S24 Ultra
  • Titanium Black
  • 12 GB RAM
  • 256 GB Storage
₹129,999₹134,999
Buy now
5% OFF
Apple iPhone 15 Pro Max
  • Black Titanium
  • 8 GB RAM
  • 256 GB Storage
₹137,990₹144,900
Buy now
13% OFF
Xiaomi 14
  • Matte Black
  • 12 GB RAM
  • 512 GB Storage
₹69,999₹79,999
Buy now
8% OFF
Apple iPhone 15 Plus
  • Black
  • 6 GB RAM
  • 128 GB Storage
₹82,600₹89,900
Buy now
33% OFF
Xiaomi Pad 6
  • Mist Blue
  • 6 GB RAM
  • 128 GB Storage
₹26,999₹39,999
Buy now
53% OFF
Lenovo Tab M10 5G
  • Abyss Blue
  • 6 GB RAM
  • 128 GB Storage
₹21,999₹47,000
Buy now
30% OFF
Realme Pad 2
  • Imagination Grey
  • 6 GB RAM
  • 128 GB Storage
₹20,339₹28,999
Buy now
31% OFF
Samsung Galaxy Tab A7 Lite
  • Silver
  • 3 GB RAM
  • 32 GB Storage
₹9,990₹14,500
Buy now
23% OFF
Infinix INBook X1 Neo XL22 Laptop Intel Celeron Quad Core 8 GB 256 GB SSD Windows 11
  • Blue
  • 4 GB RAM
  • 128 GB SSD
₹22,990₹29,990
Buy now
33% OFF
Asus TUF Gaming F15 FX507ZV LP094W Laptop
  • Mecha Gray
  • 16 GB RAM
  • 512 GB SSD
₹57,990₹85,990
Buy now
37% OFF
Asus Vivobook K15 OLED KM513UA L712WS Laptop
  • Indie Black
  • 16 GB RAM
  • 512 GB SSD
₹51,990₹81,990
Buy now
30% OFF
Asus ROG Zephyrus G14 GA401IU HA246TS Laptop
  • Eclipse Grey
  • 16 GB RAM
  • 512 GB SSD
₹90,990₹129,990
Buy now
NEXT ARTICLE BEGINS